An Analysis of Economic and Social
Development in Barbados:A Model for Small Island Developing States

ACKNOWLEDGEMENT

The Economic Commission for Latin America and the Caribbean (ECLAC)

Subregional Headquarters for the Caribbean wishes to acknowledge the
assistance of

Professor Andrew S. Downes in the preparation of this report.

FOREWORD

The contemporary international system which has, as its hallmarks, the
intensified globalisation of international relations and the entrenched philosophy of
economic liberalism, has confronted small island developing States with a number of major
challenges. The globalisation of markets, for example, has brought in its wake, a number
of impacts that strike at the very core of the domestic structures of these States, even
as they pursue strategies, internally as well as externally, towards their sustainable
development. In this regard, the drive to competitiveness that is to be generated by
domestic structures but exercised and even evaluated, at the international level,
involving institutions such as the WTO, constitutes a major challenge. Amid all these
strictures, these States continue to pursue a more profitable insertion into the
international economic system.

The adoption, in 1994, of a Programme of Action for theSustainable
Development of Small Island Developing States under United Nations auspices, was
envisaged to have heralded a new dispensation in which the international community would
cooperate with these insular entities in a number of critical areas, towards their
sustainable development. Nevertheless, even as the implementation of Agenda 21 the
major outcome of the 1992 Earth Summit and its progeny, the SIDS Programme of Action, were
reviewed by the United Nations General Assembly in 1997 and 1999, respectively, it was all
too evident that the commitments adopted at those major global conferences remained to be
fulfilled and that, in a very real sense, small island developing States would
increasingly have to rely on their own financial, human and other resources. Moreover, the
basic concept of vulnerability, on the basis of which small island developing
States are identified as being entitled to special forms of treatment, has come under
challenge from significant sectors of the international community.

Against the background of this less than favourable international
environment, we are presented with a case study of a small island developing State,
Barbados, one of 23 covered by the Subregional Headquarters of ECLAC for the Caribbean,
which, according to official evidence adduced, has managed to take decisions and to
implement policies that have vastly advanced its economic and social development over the
past four decades. The study reviews the significant economic and social progress of
Barbados over that period, drawing particular attention to achievements in the
diversification of the countrys productive apparatus and the transformation of its
historically monocultural profile based on sugarcane, to one of a modern, competitive,
service-oriented economy, with tourism and financial services as major components,
combined with a modest manufacturing sector.

Overall, the study specifically depicts, in the context of significant
and steady growth in national income and GDP, a pattern of effective macroeconomic
management that, apart from the period of the oil shock of the 1970s, has maintained low
inflation rates and a stable exchange rate. The necessity of recourse to an IMF structural
adjustment programme is also reviewed, as is the return to macroeconomic stability in
1993, after what is described as "three years of economic decline".
Significantly, since that period, the record is one of satisfactory growth rates,
accompanied by falling levels of unemployment.

Fundamentally, the case study highlights the effectiveness of the
countrys policy-making and other institutional structures, in the context of the
principles ofuniversalism and social welfare as a citizenship right espoused
by the Barbadian Authorities. The reformist position and incremental approach that is
evident in the area of health care and the increasing attention paid to certain groups
such as the youth, the elderly and the disabled, are also the subject of careful
examination. Housing policy, necessarily developed in the context of rising demand and
relative land scarcity, has been identified as a challenge, even as innovative approaches
are pursued. The persistence of poverty, affecting some 13 per cent of households, is
nevertheless fully recognized.

In reviewing the countrys pursuit of developmental initiatives,
the role of civil society, including NGOs and, significantly, the communications media, is
underlined. Overall, accounting for the impressive degree of social and economic
development that has been achieved in Barbados, we identify the effectiveness of a range
of social, political, economic and institutions. Such structures provide for investment in
human resources, the establishment of well-functioning social infrastructure and the
maintenance of political stability, among other aspects. Ultimately, as the progress
towards sustainable development across the Caribbean subregion is evaluated, these,
together with the indispensable financial component, are among the most salient factors
that account for the uneven performance that is the major observation in this regard.

This case study constitutes a welcome addition to the literature on the
progress of small island States towards sustainable development. As an organisation
entrusted with the implementation in the subregion of the SIDS Programme of Action and
taking into account its day-to-day performance of the role of Secretariat for the CDCC,
the Subregional Headquarters of ECLAC for the Caribbean presents this publication in the
context of the exchange of experiences, which remains a most powerful element in
South-South cooperation. The policies pursued by the small island developing State of
Barbados, as carefully examined as they have been in this study, might be approached by
policy-makers of other small island developing States not only of the Caribbean but also
and of other geographical regions, as models from which useful lessons might be derived.
In this very spirit of cooperation, ECLAC proposes to bring this case study to the
attention of the Association of Small Island States (AOSIS).

Over the past four decades, Barbados has made significant economic and
social progress. It is now regarded as an upper middle-income developing country by the
World Bank and is ranked in the mid-twenties by the United Nations Development Programme
(UNDP) according to its human development index. Barbados has been viewed as a template
for many small developing countries.

There are several features of the countrys economic and social
programme that make it an outstanding performer among small developing countries. First,
Barbados has maintained a history of economic and social development planning since the
1940s. The preparation of medium-term (five-year) plans has been complemented by annual
budgetary policy measures. While development plans give an indication of the
Governments long-term intentions, the annual budgetary measures concretise these
intentions. The approach to development planning has been largely indicative,
with the government providing the institutional and policy framework and environment for
the private sector to provide the stimulus for economic activity.

A primary objective of development policy since the 1960s has been to
diversify the productive structure of the economy which had historically depended on the
sugar industry. In addition, development policy was geared towards the creation of new
employment opportunities, the provision of social services  health, education,
housing, transport and social security  and the achievement of balanced and
sustained economic growth and development with a well-developed human resource base and
with the creation of social equity.

The post-independence economy has been associated with a general
decline in the contribution of the sugar industry to economic production and an increase
in the contribution of the services sector. Manufacturing production has also contributed
to the diversification process through the granting of fiscal incentives to both local and
foreign producers. The tourism sector too has played a key role in the diversification
process. In recent years, the government has been promoting the financial services sector
in order to further enhance the diversification drive.

Real GDP increased from Bds $441.9m in 1965 to Bds $961.8m in 1998,
representing an average annual growth rate of 2.62 per cent over the period. Real per
capita GDP rose from Bds $1803.67 in 1965 to Bds $3604.90 in 1998. Although there was an
upward trend in both real GDP and real GDP per capita, there were three periods of poor
economic performance in Barbados: 1970-75, 1980-85 and 1990-95. The economy was adversely
affected by the rise in oil prices and recession in the world economy.

The creation of employment opportunities in order to reduce the high
level of unemployment, especially among the youth has been a major challenge over the
years. While emigration to the United Kingdom, United States and Canada was used to ease
the unemployment situation in the 1950s, thegovernment was forced to look inwardly
to create employment opportunities through its diversification programme in manufacturing
and services when emigration outlets were closed. Although these new enterprises were able
to provide employment for a large segment of the labour force, unemployment still remains
a major economic problem. The government has established skill-training programmes to ease
the situation. Given the nature of the educational system whereby students are required to
attend school to the age of 16 years, a large number of persons leave the system with
little or no certification or skills. The post-secondary training programmes have been
designed to provide school leavers with the skills needed for the labour market.

The distribution of income and poverty in Barbados has not been as
severe as in other developing countries. The evidence suggests that there has been growth
in the middle-income class in Barbados. Only one study has been conducted on poverty in
Barbados, and this indicates that in 1996, 12.7 per cent of all households (over 20 per
cent of the population) were living below the poverty line. The relatively high incidence
of poverty is associated with the low human capital base of the poor who end up in
informal, low-skill and low-paying jobs.

In terms of macroeconomic management, inflation rates have been
generally low (with the exception of the oil price shock in the 1970s) and the exchange
rate regime relatively stable. Barbados has maintained a fixed exchange rate regime over
the years. Fiscal policy has been geared towards macroeconomic stability and long-term
economic growth. There is evidence of a political business cycle with expansions in
government expenditure around election time. Fiscal deficits financed by monetary
expansion have resulted in balance-of- payment problems, especially in 1981-82 and
1989-91. The government had to seek balance of payments support from the International
Monetary Fund (IMF) in 1982 and 1991. The 1989-91 period was a very testing one for the
economy as both the fiscal and BOP deficits increased significantly thus requiring major
economic adjustment. The structural adjustment programme supported by IMF funding brought
some measure of macroeconomic stability in 1993 after three years of economic decline.
Since 1993, the economy has been recording moderately high rates of economic growth and
falling levels of unemployment.

Since independence, the Barbadian economy has made good progress.
Although there are still pockets of unemployment and poverty, the economy is now more
diversified than in the 1960s. The country has been able to make the transition from an
agriculture-based economy to a services-oriented economy, with tourism playing an
important role in the diversification process. There have been periods of poor economic
performance, but these have been outstripped by periods of relatively good economic
progress. There has been growth in the middle-income class as the investment in human
capital has produced high returns. Social infrastructural facilities have been provided to
aid private sector development (that is, crowding in). Economic management in Barbados has
been largely cautious and purposive, with no extreme positions taken by different
administrations of government.

The policy and institutional framework of Barbados has been a critical
factor in the development of social policy emerging in the post-Independence period.
Social policy development in this period has generally been informed by a philosophy of
social reformism in which the state has played a central role in the development and
delivery of social services and has exerted some measure of regulatory control in respect
of private initiatives. The overarching political philosophy of democratic socialism with
its linchpin of freedom, equality, and democracy has
been evident in the drive by successive governments to maintain and improve the quality of
life of Barbadians.

Barbados entered Independence with a relatively well-established
institutional framework for the delivery of social programmes. In key areas such as
education, health, housing and employment, the structural and administrative arrangements
for service delivery were already sound and therefore facilitated the programme of
institutional strengthening and consolidation which was devised in the post-Independence
period towards increased effectiveness and efficiency. It is within the philosophical and
institutional context that the principles of universalism and social welfare as a
citizenship right came to dominate social policy formulation in Barbados.

It is clear that successive Barbadian governments have appreciated the
positive relationship between human welfare and development and this has led to the
consistent and substantial allocation of resources to the social services. This
appreciation together with important institutional and socio-cultural features of
Barbadian society have created that mutually supportive positive relationship between
social and economic development and has been largely responsible for the relatively high
quality of life that its citizens enjoy.

In the area of health policy, Barbados has adopted a reformist and
incremental approach. The decentralisation of primary health care through the polyclinic
system and the establishment of a National Drug Service programme have been pivotal
initiatives in giving effect to universal access to basic health care. In addition, there
has been the consistent development of specific institutional and programme responses to
challenges such as HIV/AIDS, solid waste disposal, the expanding proportion of elderly in
the population, the changing morbidity profile and the increasing demand for secondary and
tertiary health care. Importantly, the overarching philosophy of social development has
facilitated the management of new structural features of health care programming without
compromising the integrity of health policy and programme delivery.

In spite of the development and implementation of broad sectoral social
policy initiatives, it has become increasingly apparent that certain groups by virtue of
their location in the social structure will require very specific policy and programme
responses. Particularly in the last decade, groups such as the disabled, youth and the
elderly have been the subject of social enquiry by National Commissions or Task Forces
aimed towards the development of appropriate policy initiatives. With respect to the
disabled, there has been the drafting of a National Policy and a specialised Unit for
Persons with Disabilities. Similarly, an entire Division of Youth Affairs was created in
1995 to manage the implementation of a broad programme of youth development. As far as the
elderly are concerned, the imperative of a rapidly expanding elderly population has seen a
more aggressive attempt at integration of services through the National Assistance Board
together with a policy of decentralisation through community-based care as major policy
responses.

Barbadian governments have all emphasised the importance of education
to social and economic development - a fact that is evident in the consistently high
proportion of national expenditure accorded to the sector. The post-independence period
has seen important policy initiatives at all levels of education  from early
childhood through technical/vocational to tertiary. The policy emphasis has shifted at the
primary and secondary levels away from quantitative considerations  since there is
already universal access  to qualitative considerations with an emphasis on
preparing the next generation of Barbadian citizens to compete in an increasingly
demanding world. In this regard, the Education Sector Enhancement Programme (EDUTECH 2000)
represents one of the most ambitious initiatives in the period under consideration. At the
tertiary level and in technical/vocational education, the emphasis has been placed on
increasing the access and relevance of education.

With its dense population and physically small size, Barbados has
always faced serious challenges in respect of employment and housing for its people.
Unemployment is considered in many respects to be a primary social problem from which many
other social concerns such as poverty and crime are derived. In this regard, policies to
alleviate unemployment have been central to national development planning. There have been
four basic policy approaches to employment  job creation strategies, training
programmes, counseling, recruitment and placement programmes and social security measures.
These approaches have seen the steady decline in national unemployment rates from record
levels during the structural adjustment period to the current level of less than 10 per
cent.

The challenge of meeting housing demand in an environment of relative
land scarcity and high construction costs has been identified as a major issue for
Barbados since the 1930s. The Tenantries Freehold Purchase Act of 1980 was an important
piece of legislation which has had some impact on the inequitable distribution and
unavailability of land as a consequence of plantation society. Barbados has developed a
National Plan of Action (1998) to respond to the challenges of housing, focusing on fiscal
measures, finance, institutional development and the provision of housing for
disadvantaged groups.

The social infrastructure and environment of Barbados are important
factors in understanding the social development of Barbados in the post-independence
period. A range of factors either peculiar to Barbados among its Caribbean neighbours or
different in nature and degree, have been responsible for Barbados success. The
extensive and independent nature of the media has been critical in public education,
sensitisation and mobilisation. The wide network of NGOs and interest groups have also
played an important catalytic, advocacy and monitoring role in social development,
especially given that there is no strong tradition of pressure group political activity in
the Caribbean. The political stability of Barbados and seamless transfer of political
power has promoted popular and investor confidence and ensured that scarce national
resources have not had to be deployed in containing political unrest. Ultimately, there
has been a level of social consensus among and popular participation of key members of
civil society that has also been pivotal to creating an enabling environment for social
and economic development  an environment that has given rise to the relatively high
standard of living enjoyed by the mass of Barbadians today.

An assessment of the economic and social development of Barbados since
the 1960s therefore points to the following factors which have contributed to its success:

A high level of investment in human resource development (education, training, health
and nutrition);

The establishment of a well-functioning social and physical infrastructure (roads,
ports, telecommunications, etc);

The maintenance of political stability and a liberal democratic tradition with respect
for the rule of law and the seamless transition from one administration of government to
another;

The lack of social disharmony, ethnic, class and racial conflict;

The promotion of social capital, that is, social networks, social cohesion
and trust which serve a bonding function within groups and a bridging
function with other groups;

The ability to use the investment in human capital to effect social mobility (i.e.,
occupational mobility);

The good management of the country by well-trained economic and social technicians and
administrators. The technicians and administrators in government have focused on sound
economic management and development planning. There have been no extremes in the political
and economic management of the county;

A well-established communications and public information system which allows the
engagement of the population in public discussion;

The establishment of efficient, effective institutional and incentives framework to
regulate economic and social activities and promote national development;

The socio-cultural features of the population that permit national discipline,
diligence, respect for law and order, social cohesion and pride;

The ability to take advantage of special measures offered by the international economy
(e.g., trade preferences) and the maintenance of good international relations with key
world institutions.

Barbados can provide six important lessons for other small island
developing States (SIDS), namely: that small size is not a constraint on the achievement
of a high level of social and economic development; sound economic management and planning
is critical; there is a need to focus on the quality dimension, for example, human
resources development and social infrastructure, the establishment of a strong public
education programme to permit popular participation in the development process; the need
to develop the appropriate institutional and incentives framework to promote private
sector development and the establishment of a good surveillance/information system. Small
developing countries also have to determine the appropriate role of the State (or
government) in the development process and also to use appropriate cultural attributes to
aid social and economic progress. The leadership and management of the various sections of
the country are very critical to the development process.

Barbados is a small country by any measure. With a surface area of 431
square kilometers, its resident population was estimated at 266,800 persons at December
31, 1998. Barbados is one of the most densely populated countries in the world, with a
population density of 619 persons per square kilometer,

The economy of Barbados is small relative to other economies in that
its human resource base is narrow, its natural resources are extremely limited and its
domestic market is restrictive. A narrow human resource base implies that human resource
bottlenecks can arise in several areas of economic activity. The narrow range of local
skills usually means that a small number of persons have to carry out a wide range of
functions. In effect, a small country like Barbados tends to have a large
number of generalists and few specialists. This stretching of
skilled and semi-skilled human resources sometimes means that
there are inadequacies in administrative, managerial, technical and operational areas
which often do not manifest themselves until certain operations are fully investigated.
Many small developing countries such as Barbados rely on immigration (that is, the issuing
of work permits) to alleviate the human resource deficit problem.

Beyond the basic resources of sea, sand and sun, pockets of oil and
natural gas exist in Barbados. Although the arable land resource has been used for
agricultural production, the low diversity of natural resources restricts the potential
for resource-based economic activity in Barbados. There is some potential for the
exploitation of marine resources as an island in the Caribbean. Approximately 22 per cent
of total production in Barbados is based on the natural physical resources of the country:
agriculture, mining and quarrying and tourism.

Barbados is also characterized by a relatively small domestic market
for a wide range of goods and services. To the extent that domestic demand is diverse and
the distribution of income somewhat skewed, many production operations cannot be operated
at an economic level if they are to rely primarily on the domestic market. In order to
boost production and increase employment in a small economy such as Barbados, regional and
extraregional (i.e., outside of CARICOM) markets must be sought. The narrow range of both
human and physical resources means that such export activity is likely to be specialized,
that is, concentrated on a selected range of commodities (e.g., sugar, tourism, light
manufacturing products) and exported to a narrow range of countries (e.g., United States,
United Kingdom and Canada).

It should be noted that exports play a dual role in the economy of
Barbados. On the one hand, they can be viewed as an avenue for increasing production and
hence employment opportunities. On the other hand, they provide the foreign exchange
needed to purchase imports (competitive and non-competitive) which are used for both
consumption and production purposes. Given the specialized or concentrated nature of
domestic production relative to a diverse domestic demand pattern, imports are usually
high relative to total domestic production.

Small countries such as Barbados must interact on a continual basis
with international entities  governments, financial agencies, businesspersons, and
organizations. Changes in the international environment can therefore impact significantly
on the economy and society of Barbados. Recent changes in the international economic
environment associated with the integration of financial and commodity markets, the
liberalization of trade, the establishment of trading blocks, advancements in
information/communications and materials technology and the removal of special trading
privilege mean that small developing countries must rethink their long-term development
strategy. Furthermore, many small island states are subject to natural hazards such as
hurricanes, floods, landslides, tidal waves, earthquakes and volcanoes, which can
adversely affect the socio-economic welfare of the people of small states. Fragile
eco-systems are also found in small developing island States.

Although small island developing countries are subject to several
constraints and hazards, several of these countries have been able to provide a high
standard of living for their residents. Barbados has been identified as a model country
for other small island developing countries to emulate. It is regarded by the World Bank
as an upper middle-income developing country with a per capita gross national product
(GNP) of Bds $12,260 measured at purchasing power parity [World Bank, 2000]. The official
exchange rate has been fixed at Bds $2 for US $1 since 1975. The United Nations
Development Programme (UNDP) uses a human development index to measure the extent of
socio-economic development in a range of countries. This index incorporates measures of
longevity (life expectancy at birth), educational attainment (adult literacy and gross
primary, secondary and tertiary enrolment) and standard of living (real GDP per capita).
Barbados has been ranked in the mid-twenties out of over 170 countries. Indeed, Barbados
was ranked first among the developing countries for a number of years. In 1997, Barbados
was ranked twenty-ninth behind such small countries as Singapore, Hong Kong, Brunei
Darussalam, and Cyprus [UNDP (1999)].

With the upper middle-income status and high human development ranking
of Barbados, the country was used as a model by the international lending agencies in the
1980s. The Barbados Model, as it was called, was viewed as a template for many
small island developing countries which have limited resources but wanted to achieve a
relatively high standard of living.

The United States-based Freedom House has regarded Barbados as one of
the freest countries in the world where there is a democratic tradition and
respect for basic human rights. Such a ranking has enhanced the economic and political
standing of the country in the eyes of the international community.

Some attempts have been made to explain the features behind the success
of Barbados (i.e., the Barbados Model) so that other countries can learn some useful
lessons for their own development thrust. Ross-Brewster (1995), in a comparison of the
development experiences of Barbados and Jamaica, attributed the relative success of
Barbados to its better endowment of human capital (i.e., investment in education, training
and health) and the higher stock of social capital. Social capital is defined
as that combination of norms, interpersonal trust, social networks and organizations which
bring about lasting social cohesion/integration in a country. The structure of the
interpersonal relations in a society and the nature of the social institutions (church,
family, trade unions, charities, community groups) are integral for the accumulation of
social capital which bring economic and social returns in the long run. Although it can be
argued that there has been some depreciation (or destruction) of social capital in
Barbados in recent years, the previous accumulation has been vital to the recent
prosperity of Barbados.

Blackman (1998) has sought to identify the historical roots of the
so-called Barbados Model. He notes some important features of the country
which have been important to its high levels of human and economic development: highly
developed social infrastructure (roads, ports, public utilities), absence of social and
political unrest, the deep entrenchment of civil rights and democracy, skillful economic
management, investment in health and education, a tolerance and compassion for the
disadvantaged as evidenced in a well-established social security scheme and the rule of
law.

He has identified seven historical accidents which have
given rise to the Barbados Model:

Its strategic physical location between Europe and the Americas; it was the first port
of call and springboard for the English penetration into the Americas;

It was a colony settlement and not a colony of conquest 
the English were able to establish their institutions at an early stage in the European
settlement of the country (i.e., Parliamentary government, legal system of common law,
schools and churches);

Its early accession of free coloured persons to political and civil rights by the 1820s;

The early exposure of Barbadian slaves to education so that by the end of the eighteenth
century many slaves were literate;

Because of the small size of the country and the relatively high population density,
many freed persons were forced to remain on the plantations, thus allowing for full
absorption of the owners values and attitudes;

The noblesse oblige of the coloured and black elite to fight for the rights
and improved welfare of former slaves after emancipation;

Sheer economic luck as the sugar industry benefited from changes in
competing countries and the migration outlets were available at different stages of the
countries development.

Wickham (1997) has also identified the absence of sharp demographic
differences (i.e., no sharp ethnic and social groups) and the relative similarity of the
political parties in Barbados as being responsible for the relative political stability of
the country. Empirical research in recent years has indicated that political stability in
a country is critical to the economic growth and development process [Barro, 1998].

Although historical antecedents, social and human capital and political
stability are important elements for the prosperity of a country, the social and economic
policies adopted by the government of a country are also critical to its development.
Government policy measures help to create and build on the stock of human, physical,
social and institutional capital of a country.

This study reviews the economic and social policies and programmes
adopted by Barbados during the post-independence (1966) period in order to identify any
special set of measures which could have contributed to the relative prosperity of the
country (i.e., upper income and high human development rankings). It is hoped that
important lessons can be identified from the Barbadian experience which can be replicated
in other small developing island States.

The structure of the presentation is as follows: in the next section,
an analysis of the evolution of the Barbadian economy since independence (1966) is
undertaken. This analysis involves an examination of the development strategies adopted,
the structural changes which have taken place in the economy, the factors affecting
employment, unemployment, income distribution and poverty, macroeconomic management and
the impact of changes in the international economic environment on the Barbadian economy.

In the third section, a review of social development is presented with
a focus on the institutional framework within which social policy has been formulated and
implemented, developments in social policy since independence  health, education,
youth, disabled, elderly, housing and employment, and the nature of the social
infrastructure and environment.

The final section provides an overview of the main features of the
economic and social development of Barbados in the post-independence era and identifies a
number of lessons which have emerged from this experience. These lessons, as indicated
earlier, may prove to be very useful to other small developing island States.

Development planning can be viewed as the formulation of a programme of
actions to be undertaken by the political and economic authorities of a country in order
to achieve specific long-term national goals. The objectives of national development
(i.e., economic, social, cultural, political) are specified in such a way that an
assessment can be made of their achievement at the end of the planning period. The
achievement of development objectives and given targets involves the adoption of a
strategy or an optimal way by which the resources of a country can be utilized
to achieve the development goals. Development goals should reflect the hopes and
aspirations of the people of a country with respect to raising the quality of their lives
over time. Development planning therefore is the process by which the national effort is
coordinated to achieve these developmental goals. Such planning may be sequenced in terms
of the short-run (1-2 years), medium-run (5 years) and the long-run or perspective period
(10-20 years).

The emergence of a partial ministerial governmental system in 1946
coincided with the formulation or, more accurately, the writing of development plans in
Barbados. The initial reason for the preparation of such plans was the stipulation of the
Colonial Development and Welfare Acts of 1940 and 1945, which required planned
development in the country. Even after the termination of these Acts and the
granting of independence in 1966, the preparation of development plans has continued. One
of the reasons for the continued preparation of development planning documents lies in the
requirements of external funding agencies, which need to have some idea of the course of
development of the country.

Development planning documents have been a continual feature of the
economic management of Barbados since 1945. The first document was a Ten-Year
Development Plan for Barbados: Sketch Plan of Development 1946 to 1956" which focused
on social welfare (public health, education, housing, etc). This long-term or perspective
plan has been followed by a series of medium-term planning documents. Prior to
independence in 1966, there were five medium-term-planning documents while there have been
six development plans since independence. The current development plan covers the period
1993-2000 and is complemented by a Medium Term Macro-Economic Strategy 1996-1999 prepared
in May 1996 by the current government.

In addition to these medium-term plans, there are also annual
statements of financial and budgetary proposals and estimates of expenditure prepared by
the Government. These statements began with the granting of internal self-government in
1961. The budgetary (fiscal) policies in these annual statements provide the specific
measures which the Government would adopt to realize the programmes set out in the
development planning documents. While development plans provide an indication of the
Governments intentions, the annual budget and estimates concretize these intentions
and hence become an influential tool of short-run macroeconomic management and medium-term
economic development policy.

The approach to development planning in Barbados, as in many other
Caribbean countries, has been largely indicative with the government providing
the institutional, infrastructural and policy framework and environment for the private
sector to provide the stimulus for economic activity. The Governments development
strategy has been carried out through a series of measures, namely, the implementation of
projects/programmes within the development plans, the enactment of legislation to provide
the legal framework for social and economic change to take place, the use of monetary,
fiscal, commercial and other economic policy measures, and the establishment of economic
institutions. Development planning in Barbados since 1945 has been indicative in
character, pragmatic in implementation and predicated on the development of a mixed
economy (i.e., a managed market economy).

In effect, development planning documents have been largely public
sector expenditure plans  housing, health, sanitation, education, transport, public
works, social security  rather than comprehensive plans for active involvement in
the production process. Although the Government has established several public enterprises
or has purchased shares in other enterprises, the vagueness of these actions in the
development process has resulted in the failure of several public enterprises as economic
entities. The greatest success stories of public enterprises in Barbados lie in its
financial institutions (e.g., Insurance Corporation of Barbados, Barbados National Bank)
and the Barbados Port Authority.

To the extent that an economic development strategy refers to a
conscious set of actions to achieve specific goals via the rational use of available
resources, the development planning documents and the annual budgetary statements provide
the main sources of information on programmes and policies which have been implemented to
overcome the economic problems of the country and realise the expectations of the
population. The social and economic conditions which exist during some period of time
usually determine the strategies, plans, programmes and policies formulated in various
planning documents.

An assessment of development planning since the 1960s provides a number
of development policy goals that have been pursued by the Government of Barbados. The
first development policy goal relates to the need to diversify the productive structure of
the economy. From the 1640s until the 1940s, sugar production was the main source of
output growth, employment and foreign exchange. The industry prospered under a protective
imperial preferential arrangement. However, increased competition from subsidized beet
sugar on European market, the development of alternative sweeteners and the changing
nature of preferential arrangements for sugar exports resulted in a need to develop
alternative areas of economic production. Furthermore, the total dependence on the sugar
industry and its organizational structure, especially in terms of ownership, was no basis
for effecting economic change (or transformation) in the country.

The second development policy goal was the creation of new employment
opportunities hence reducing un- and under-employment. The seasonal nature of employment
in the sugar industry further aggravated the problem of providing any productive jobs. As
Lewis (1958) noted, the best way to judge the development of a country is through its
provision of productive employment for the labour force.

The third objective of development planning since independence has been
the provision of social services  health, sanitation, education, housing, transport
and social security  in order to eradicate poverty in the country. Recent
formulations of this objective are incorporated in the concept of enhancing human
development, that is, the widening of the choices available to the population and the
enhancement of the capabilities of people to take advantage of these new choices. Human
development therefore includes social and economic development.

The fourth development policy objective has been the achievement of
balanced and sustainable economic growth and development. Balanced growth is conceived on
two fronts: regional or physical (whereby all areas of the country can benefit from
economic expansion) and sectoral (more areas of economic activity contributing to the
growth process).

The fifth policy objective identified in the post-independence plans is
the development of the human resource base of the country through training and education
in new areas of technology (e.g., computer technology). This focus on human resources
development would be vital to enhancing national productivity and competitiveness. The
final development policy objective is the creation of a more equitable and cohesive
society with greater participation in the decision-making process. This would involve the
inclusion of civil institutions into a new governance framework and communicating with the
public on a regular basis.

The early post-independence development strategy was to focus on
increasing economic growth through diversification of the economy. The Government hoped
that the other objectives of employment creation, poverty alleviation and social equity
would be achieved through the trickle down mechanism [see also Howard, 1989].
Early development planning was influenced by the economic thinking of the period which
emphasized the promotion of economic growth by increasing the national saving ratio (i.e.,
savings to national income ratio). The Development Plan 1979-83 had as its theme
Planning for Growth. The focus on economic growth is reflected in the planning
targets for respective planning periods. During the planning periods between 1960 and
1983, the target for real gross domestic product (GDP) growth was between 4 and 5 per cent
per annum [see Table 2.1].

Table 2.1

Growth and employment targets for Barbados for selected planning periods

Planning
period

Planning
targets

1960-65

Growth of national income of at least 4% per annum

Provision of 40,100 new jobs at home and abroad

Doubling the annual value of industries other than sugar

1965-68

Average annual rate of growth of GDP of 4% (at 1964 prices)

1969-72

A real GDP growth of 5% per annum (1968  base year)

A real per capita GDP growth of 3.5% per annum

1973-77

An annual rate of growth of GDP of 5% (1972  base year)

Reduction in the unemployment rate from 7.3% in 1970 to 5.6% in 1977

1979-83

An annual rate of growth of GDP 4% (1979  base year)

Decline in unemployment rate from 13.9% in 1978 to 7.8% in 1983 (provision of 14,000 new
jobs)

1983-88

Average annual rate of growth of GDP of 3.5% (1982  base year)

Reduction in unemployment rate from 13.6% in 1982 to 8% in 1987

1988-93

A real GDP growth rate of 2.5% per annum

Reduction in unemployment rate from 17.9% in 1987 to 15.8% in 1992

1993-2000

A real growth rate of 3.3% per annum (1993  base year)

Fall in the unemployment rate from 24% in 1993 to 10.0% in 2000

Source: Development Plans of Barbados: 1960/65 to
1993/2000

The macroeconomic difficulties of the late 1970s and 1980s along with a
new thinking in development policy brought a change in the development strategy adopted by
the Government. Greater emphasis was placed on non-economic growth objectives (i.e.,
poverty alleviation, social development, and employment creation). Economic growth targets
were reduced to between 2.5 and 3.5 per cent per annum and the themes of the plans changed
to Change Plus Growth (1983-88), A Share For All
((1988-93), and Prosperity Through Increased Productivity (1993-2000).

The early focus of the Government was to promote production in the
manufacturing and tourism sectors as part of its development strategy to diversify the
production structure and to enhance growth and employment opportunities. At the same time
attempts were made to promote non-sugar agriculture in order to achieve some degree of
self-sufficiency in food production. Given the small size of the economy, the Government
espoused an export-led strategy of economic development with export manufacturing
(garments, chemical, electronic components) and tourism being the early areas of focus. In
the Development Plan 1988-93, the Government perceived that the export services sector
based on tourism, financial and professional services would dominate economic activity by
the year 2000. This perception is re-emphasized in the current Development Plan 1993-2000.

The Government has paid special attention to the provision of social
services such as health, education, housing, transport and social security. Barbados is
the only country in the Caribbean with an unemployment insurance scheme that was
introduced in 1981. Social development has been an important element in alleviating
poverty and providing the human resources needed for the development of the country. In
the area of education, free education is available from the primary to
tertiary level in Barbados. While a social demand approach to educational planning was
adopted in the early post-independence period, the Government was mindful that the
educational system should satisfy the manpower needs of the country. As stated in the
Development Plan, 1988-93, "the formal educational system will undergo further
changes ensuring a balanced technical, vocational and academic curriculum satisfies the
manpower needs of the economy and society" (p 43). In the area of health, the
Government has established a system of polyclinics which provide health care services to
persons throughout the country. The National Insurance Scheme provides benefits for the
working population and pensioners.

Although the governing of the country has been undertaken by two
political parties since the 1960s (the Barbados Labour Party and the Democratic Labour
Party), they have both espoused a liberal democratic philosophy whereby the State would
offer incentives to private entrepreneurs who would take the lead in the economic
development process. In effect, the States role has been largely
parametric.

One aspect of the development strategy adopted by the Government has
been the establishment of economic institutions to help finance and promote the
development process. Since 1966, the following economic institutions have been
established: Barbados Investment and Development Corporation (a merger of the Industrial
Development Corporation and the Export Promotion Corporation), the Barbados National Bank
(a merger of the Barbados Savings Bank, the Sugar Industry Agricultural Bank and the
Agricultural Credit Bank), the Central Bank of Barbados, Barbados Agricultural Development
and Marketing Corporation (a merger of the Agricultural Development Corporation and the
Barbados Marketing Corporation), the Barbados Tourism Authority, the National Petroleum
Corporation and National Oil Company.

Social institutions have been established to promote social development
in the country: Child Care Board, National Assistance Board, National Housing Corporation,
Sanitation Service Authority and the Urban and Rural Development Commission. In 1999, a
Ministry of Social Transformation was established to coordinate and direct the social
development process in the country. Poverty eradication and human development are major
objectives of this Ministry.

While all of these social and economic institutions have not always
performed as satisfactorily as expected, they have however contributed to the social and
economic prosperity of Barbados. For example, the Central Bank of Barbados has been a
vital source of sound economic advice and information. The Barbados Tourism Authority and
the Barbados Investment Development Corporation have been at the forefront of promoting
tourism arrivals, foreign direct investment and economic growth in the tourism and
manufacturing sectors, respectively. Recent research on the role of institutions (that is,
organizations and rules) indicates that their quality or performance is critical to the
growth and development process [Aron, 2000]. Periodic reviews of public institutions have
led to changes in the institutional framework within which social and economic policies
have been implemented. For example, the formation and re-focus of the Barbados Investment
and Development Corporation resulted from a merger of the Industrial Development
Corporation and the Export Promotion Corporation. The new institution has formed part of
the export promotion thrust in the manufacturing sector.

The social institutions established by the government have been
supported by several non-governmental organizations  the Rotary Club, Kiwanis,
National Organization of Women, Heart Foundation, Cancer Society, several sports
organizations, trade unions, churches. These institutions have been important to the
maintenance of social cohesion and the social development of Barbados.

In the area of human resources development, the government has
strengthened the Samuel Jackman Prescod Polytechnic and the Barbados Community College. A
major programme of introducing information technology into the teaching and learning
process has been recently implemented by the Government in the school system. A National
Productivity Council has been established to promote productivity in the country. The
Council which emerged out of the economic crisis of the early 1990s is a tripartite agency
(Government, trade unions and private sector representatives) and has played an integral
part in the governments strategy to link pay to performance. A Vocational Training
Board and a Technical and Vocational Education and Training Council have been established
to promote technical and vocational training in the country.

The social infrastructure of the country  roads, sea and
airports, public utilities (water, electricity, and telephone)  has been modernized
and expanded to promote and facilitate the smooth operation of local and foreign
businesses. These facilities have been supplemented by various fiscal and monetary
incentives such as tax-free concessions, duty-free imports, accelerated depreciation
allowances, low interest rates, low rental accommodation and promotional programmes. These
measures have formed the basis of the Governments indicative approach to development
planning.

In order to boost domestic savings to assist with the financing of the
development programme, the Government has issued savings bonds, treasury notes and
debentures. Income tax relief has been granted to holders of the financial assets. Saving
with credit unions has always been encouraged and the Securities Exchange of Barbados
provides an avenue for investing in public companies.

Given the Governments policy of allowing the private sector to
promote growth and employment, it has undertaken a public sector reform programme with a
view of easing the transaction process between government agencies and private
enterprises. An office of Public Sector Reform has been established in Government. The
public sector reform programme incorporates the following elements: human resources
management (upgrading the human resource functions, linking productivity and pay),
financial management, information technology (linking various departments), supplies and
procurement management, an employee assistance programme, the establishment of internal
reform committees and better customer service. While the public sector reform is an
ongoing process which began in the mid 1990s, some departments have demonstrated some
measure of improvement in their operations (e.g., the Customs Department, Immigration
Department and the Licensing Authority). A Privatisation Unit was also established in the
early 1990s to oversee the comprehensive reform of public enterprises as the Government
sought to privatise some of its operations.

With the implementation of a structural adjustment programme in 1991,
the Government introduced a medium-term economic strategy to supplement the long-term
development programme. The main goals and objectives of the medium-term economic strategy
(1996-1999) were the promotion of economic growth, maintenance of low levels of inflation,
the reduction of unemployment and the achievement of a sustainable balance of payments.
The fixed exchange rate with the US dollar (Bds $2=US $1), which has been in place since
1975, has been identified as a policy anchor. The major sources of growth have been
identified as the export services sector (tourism, information services, professional and
financial services) and export manufacturing and agriculture. The policy agenda to meet
these objectives included indirect tax reform (i.e., the introduction of a value added
tax), trade reform (implementation of agreements relating to the common external tariff,
tariffication of licenses and quotas), divestment of several public enterprises, public
sector reform, (streamlining the operations of the government), financial sector reform,
development to enhance efficiency and promote savings, employment creation and human
resources development, the introduction of a land use policy which will guide the use of
land for commercial, residential and agricultural purposes, measures to protect the
physical environment and strengthening the social sector to enhance human development and
alleviate poverty. The medium-term economic strategy therefore combines elements of
short-term macroeconomic management and long-term development planning.

In summary, the approach to development planning in Barbados has been
largely indicative, with the Government playing a facilitating role for the private sector
to generate output and employment. In its parametric role, the Government has
provided the institutional framework, legal machinery, social infrastructure and the
economic incentives for the private sector to operate. In some cases, the Government has
engaged in direct production, but this has been reduced in recent years. In addition to
its facilitating and regulatory role, the Government has also provided for the social
development of the country by expanding its provision of social services. Given the small
size of the economy, the economic strategy has been largely to promote exports 
services, manufacturing and agriculture. It has sought to maintain macroeconomic stability
with the fixed exchange rate being used as a policy anchor.

Worrell (1982) has identified three phases of economic activity in
Barbados since the end of the Second World War: 1946 to 1962  a period of
agricultural dominance; 1963 to 1970  a period of transition and 1971 to the present
 a period of export diversification. These phases indicate an attempt by the
economic authorities to reduce the monopoly control which sugar agriculture had held since
the 1640s, and to promote a programme of production diversification and growth.

The macroeconomic performance of the country can be examined through
two basic aggregates: real gross domestic product (GDP) and real GDP per capita. Both
indicators suggest that Barbados has made significant advances over the period 1965 to
1998. Real GDP increased from Bds $441.9 m in 1965 to Bds $ 961.8 m in 1998, that is, an
average annual growth rate of 2.62 per cent. Real GDP per capita increased from Bds
$1803.67 in 1965 to Bds $3604.9 in 1998, representing an average annual growth rate of
2.31 per cent [see Table 2.2]. The low differential growth rates between real GDP and real
GDP per capita indicate that the population growth rate was low over the period (0.3 per
cent per annum). The low population growth reflects the efforts at family planning and
mass education which began in the 1950s. The general fertility rate (number of births per
1000 women aged 15 to 44) declined from 105 in 1970 to 64 in 1990. This reflects a decline
of the birth rate of 20.4 births per 1000 persons in 1970 to 16.5 births per 1000 in 1990.
The number of women aged 15 to 44 years increased from 46,600 in 1970 to 67,200 in 1990.
Some migration has also affected population growth over the period.

Table 2.2a

Levels of Real GDP and Real GDP per capita , 1965-1998

Year

real gdp
(Bds $m at 1974 prices)

real gdp per
capita (Bds $)

1965

441.9

1803.67

1970

627.7

2620.88

1975

628.1

2552.21

1980

802.3

3216.92

1985

786.9

3061.87

1990

880.9

3377.68

1995

858.9

3248.50

1998

961.8

3604.90

Table 2.2b

Growth Rates of Real GDP and Real GDP per capita,1965-1998

Period

average
annual growth rates (%)

Real GDP

Real GDP per capita

1965-1970

7.27

7.76

1970-1975

0.01

-.053

1975-1980

5.02

4.74

1980-1985

-0.39

-0.98

1985-1990

2.28

1.98

1990-1995

-0.50

-0.78

1995-1998

3.80

2.10

Source: Barbados: Economic Reports (various
issues)

The period 1965 to 1970 corresponds to the end of the period of
agricultural dominance and the period of transition identified by Worrell (1982). This was
a period of relatively high economic growth in the country. The average annual growth rate
of real GDP and real GDP per capita was approximately 7 per cent [see Table 2.2b].
Although there was an effective devaluation of the Barbadian dollar (which was tied to the
pound sterling) in 1967, economic growth remained high due to the favourable export market
for sugar during the 1965-70 period.

The first phase of export diversification, 1970-75, was associated with
a poor economic growth performance. The average annual growth rate was under 1 per cent
for the period. The poor economic performance can be attributed to the world commodity
shortage which brought significant increases in the prices of agricultural products and
the oil crisis in 1973 and 1974, which caused prices to be quadrupled. The
short-run macroeconomic consequence of the increase in international commodity prices was
the reduction in domestic and foreign demand and hence a fall in aggregate domestic
production.

The economy recovered from the oil shock in the late 1970s
as reflected in the increase in the average annual growth rate of 5 per cent over the
1975-80 period. The recovery was due mainly to the reduction in import prices and an
increase in tourism activity. The recovery was however short-lived as the rise in oil
prices in 1979 sent the international economy into a short recession in the early 1980s.
Declines in economic activity were recorded in both tourism and manufacturing. As a
result, the average annual growth rate for 1980-85 was negative. Economic activity during
the 1980-85 period was adversely affected by several events. First, export earnings from
sugar were adversely affected by the reduction in the United States import quota from
20,000 tonnes in 1980 to 5,000 tonnes in 1988. Secondly, the decline in economic activity
in CARICOM member countries severely affected regional exports of garments and furniture.
Intraregional trade was adversely affected by the collapse of the CARICOM Multilateral
Clearing Facility (CMCF) in 1983. The CMCF grew out of a system of bilateral clearing
agreements governing the settlement of trade balances between countries. During its
existence, intra-regional trade was at a high level [Blackman, 1997]. With the balance of
payments problems faced by Guyana and Jamaica in the late 1970s, the clearing facility
broke down, as these countries were unable to service their debts with Barbados and
Trinidad and Tobago. Finally, the greatest impact on the economy was the closure of major
electronic components assembly operations between 1983 and 1986 due partly to the global
over-production of computer chips and high operating costs. In the garment industry, there
was also the closure of a major operation in 1986.

In 1986, there was however a marked increase in economic activity as
the economy recorded a growth rate of approximately 5 per cent, due mainly to the
expansion of the governments capital works programme. The changes in the income tax
structure which resulted in a rise in real disposable income and hence aggregate demand
contributed partly to the high growth rate in 1986. The economy made some modest recovery
during the 1985-90 period as the average annual growth rate increased to 2.3 per cent. The
Government was particularly concerned about the relative growth rates of the foreign
exchange using and foreign exchange earning sectors. During the period
the foreign exchange using sectors grew at a faster rate than the
foreign exchange earning sectors, hence creating a serious drain on the
foreign exchange reserves. The main growth sectors were construction, electricity, gas and
water, government services and transportation, storage and communications. The tourism
sector was particularly robust during the 1986-89 period with an average growth rate of 10
per cent per annum. In 1990, there was a slump in all the major sectors except non-sugar
agriculture.

The period 1990-95 was characterized by a decline in economic activity
which forced the Government to seek financial assistance from the International Monetary
Fund (IMF) and the World Bank. The Inter-American Development Bank (IDB) was also
approached for financial assistance. Real GDP declined from Bds $909m in 1989 to Bds
$791.9m in 1992, while per capita real GDP fell form Bds $3492.12 in 1989 to Bds $3009.88
in 1992. The decline in economic activity and associated twin deficits on the balance of
payments (BOP) and fiscal accounts resulted in the government implementing a structural
adjustment programme (stabilization and structural reform). Since 1992, there has been a
recovery in the Barbadian economy as real GDP increased from Bds $791.9m in 1992 to Bds
$961.8m in 1998, that is, an average annual growth rate of 3.3 per cent. The economy has
been experiencing an upward trend in output since then [see Figure 2.1].

Over the period 1960 to 1998, there was a shift in the composition of
domestic exports. During the 1960s, sugar and its by-products (molasses and rum) accounted
for over 80 per cent of domestic exports. With the active promotion of manufactured
production, the share of manufactured exports in total domestic exports rose from 7 per
cent in 1960 to a peak of 86 per cent in 1985. The share of sugar and its by-products has
continued to decline while the share of manufactured exports in total domestic export of
goods surpassed the 70 per cent mark in the 1990s. The range of manufactured exports has
also widened  from garments and food and beverages to chemicals, electronic
components and data processing. The shift from sugar to manufactured exports also saw a
shift in export market orientation from Europe to the United States and, to a lesser
extent, CARICOM. The export of services also increased significantly over the period 1966
to 1998. In 1966, services exports accounted for 52.3 per cent of total exports of goods
and services, while in 1998, services exports rose to 80 per cent of total exports.
Tourism services and, in recent years, financial services, have been a major contributor
to the expansion of exports from Barbados,

Very little research has been undertaken on the factors which affect
economic growth in Barbados. An econometric study undertaken by Lewis and Craigwell (1998)
for the period 1960 to 1991 identified real capital investment and human capital
investment as the main factors influencing economic growth. Other research on the
Caribbean by the World Bank has also identified foreign direct investment and exports as
having a positive impact on economic growth.

The savings-investment nexus is central to the economic growth process.
Over the period 1973 to 1998, savings deposits with commercial banks increased from Bds
$100,446 in 1973 to Bds $1,698,159 in 1998, that is, an average annual growth rate of 12.1
per cent [see Table 2.3]. Allowing for an average inflation rate of 7.8 per cent over the
period, real financial savings increased by 4.3 per cent per annum. Time
deposits increased from Bds $99,741 in 1973 to Bds $738,070 in 1998, that is, an average
annual growth rate of 8.6 per cent. Financial savings in the form of saving and time
deposits in commercial banking have therefore recorded a positive growth rate since
independence. Government savings (that is, the current account balance) have been largely
positive in nominal terms in the post-independence period. Deficits on current account
were recorded in four fiscal years since 1965/66 (i.e., 1973/74, 1976/77, 1987/88 and
1990/91) [see Table 2.4]. Government savings have been used to help finance its capital
works projects which have also been supported by foreign loans.

The nominal value of gross capital formation (gross investment)
increased from Bds $156.2m in 1975 to Bds $918.9m in 1998, that is, an average annual
growth rate of 8.0 per cent [see Table 2.5]. If the inflation rate is used as a deflator,
gross investment (new plus replacement investment) hardly grew during the period. The
investment-GDP ratio was generally under 0.25 over the period 1975-1998. Much of the
capital investment was in private building activity. Gross investment (in current prices)
increased between 1975 and 1982, but declined between 1983 and 1985. There was a steady
increase over the period 1986 to 1990 when the structural adjustment programme was
implemented. Since 1993, there has been a significant increase in gross capital
investment, especially in the private construction sector. Total private foreign
investment was largely erratic in Barbados over the period 1977 to 1994. While there was a
general growth in such investment in the late 1970s and early 1980s, there was a decline
during the early 1990s. There has been some recovery in private foreign investment in
recent years [see Belgrave and Ward, 1997].

Although gross capital formation is calculated in current prices, it
seems that there is a close association between the pattern of gross capital formation and
economic growth over the period 1975 to 1998. Over the sub-period 1975-80, the average
annual growth rate of capital formation was 22.1 per cent while it was 2.6 per cent
during the period 1980-85, 11.8 per cent during 1985-90, -2.6 per cent during 1990-95 and
17.2 per cent for the 1995-98 period. This pattern is reflected in the average annual
growth rates of real GDP [see Table 2.26].

Human capital investment in the form of expenditure on education and
training has been important to the post-independence development of Barbados. A recent
study by Boamah (1997) attributes nearly 50 per cent of economic growth over the 1964-93
period to the contribution of the labour input. While the pure labour input (employment of
persons) accounted for 20 per cent of the output growth, the qualitative improvements of
the workforce (human capital deepening) accounted for approximately 30 per cent.

The growth of the Barbadian economy since 1966 points to the importance
of external influences on domestic economic activity. The oil crises of 1973/74 and 1979
and the recessions in the United States in 1979/83 and 1989/91 had an adverse effect on
the Barbadian economy. The growth performance of the country has been dependent on the
performance of the export sectors  sugar, light manufacturing and tourism.

Development planning and policy have been directed towards
diversification of the production structure since the 1960s. While structural change in an
economy can result from natural forces such as changes in consumer
preferences, technical change and producer behaviour, deliberate government policy plays
an important role in the process. Underlying the growth process in the economy are
significant structural changes which must be assessed.

A key feature of the change in the structure of production in Barbados
has been the decline in the contribution of the agricultural sector (especially sugar
agriculture). The share of sugar agriculture in GDP declined from 20 per cent in 1965 to
2.1 per cent in 1998, while the contribution of non-sugar agriculture fell from 6.3 to 3.5
per cent over the same period. The share of manufacturing in total production has varied
between 9 and 12 per cent over the post-independence period. The tourism sector (i.e.,
hotels and restaurants), which has been the target of Governments policy measures,
recorded an increase in its contributions to GDP from 8.3 per cent in 1970 to 15 per cent
in 1998 [see Table 2.6]. Both the manufacturing and tourism sectors have benefited from
fiscal incentives granted by the Government [see Cox, 1982; Phillips, 1982; Downes, 1985].
Foreign investment has played an important role in the development of these sectors. The
need to encourage foreign investment stems from the inadequacy of domestic savings to
finance the level of investment needed to expand the productive sectors. By offering
fiscal incentives such as accelerated depreciation allowances, duty-free importation of
raw materials and capital equipment, and subsidized rental accommodation, the government
expected an inflow of foreign capital to supplement domestic capital formation. In the
light-manufacturing sector, foreign-owned companies have been the main exporters of goods
and employers of labour (i.e., garments, chemicals, electronic components, and in recent
years, data processing). In the tourism sector, large hotels are owned primarily by
foreign concerns.

The services sector (distribution, tourism, business and general and
Government services) has grown significantly since the 1960s. In 1965, this sector
accounted for 40 per cent of the GDP while in 1998, it accounted for 65 per cent of GDP.
In recent years, the Government has sought to actively promote new tourism services (e.g.,
eco-tourism, sport tourism), financial, business and professional services.

While there has been some degree of structural change taking place
among the sectors, there have been important intra-sectoral changes. In the agricultural
sector, a gradual consolidation of the operations has been associated with sugar
production. While sugar cane production still takes place on large plantations, these have
declined over time, as land has been sub-divided for residential and commercial purposes.
Sugar production took place in 34 factories in the 1950s, while today, only three
factories are in operation (Andrews, Buckley and Portvale). Sugar production declined from
199,000 tonnes in 1965 to 48,000 tonnes in 1998. There has been a corresponding decline in
the areas reaped, from 20,200 hectares in 1965 to 8,400 in 1998. A significant percentage
of land has changed from agricultural use to residential and commercial use [see Downes et
al, 1996].

The sugar industry has been beset by a number of problems which have
hampered its foreign exchange earning ability: high level of debt, high production costs
relative to export sugar prices, poor management, changing weather conditions, a volatile
global market, industrial action by workers and competition from alternative sweeteners.
The Government has periodically offered price support to the industry and has restructured
its operations. Sugar is still exported under a guaranteed market scheme with the Lomé
Convention (i.e., the Protocol on ACP Sugar) and its price in European (i.e., United
Kingdom) market is linked to the price paid to beet sugar producers in Europe. The
consolidation of sugar production operations has been undertaken in order to achieve
economies of scale (i.e., lower unit costs of production).

Diversification in the agricultural sector has taken place primarily
through the development of a non-sugar agricultural programme. Traditionally, Barbados has
imported a large proportion of its food requirements. Each development plan has outlined a
programme of non-sugar development, especially in the areas of livestock, vegetables and
other food crops. An Agricultural Development Corporation (ADC) was established in 1965
and charged with the responsibility of promoting the development of vegetable and
livestock production and research. Previously, a Barbados Marketing Corporation (BMC) was
set up in 1961 to engage in the marketing of these agricultural products. The agencies
were merged in the 1990s to form the Barbados Agricultural Development and Marketing
Corporation (BADMC). The agricultural diversification programme has not met with the
degree of success that was envisaged. Although the country has been able to attain some
degree of self-sufficiency in a number of areas (e.g., milk, onions, carrots, potatoes and
poultry), the programme has been beset by a number of problems over the years. These
problems include the general shortage of knowledge, skills and managerial expertise, the
part-time nature of small scale farming, the negative attitude of persons towards
employment in agriculture, the marginality and fragmentation of small-scale production,
adverse weather conditions, diseases and the sustainability of production.

The manufacturing sector has undergone significant changes in terms of
the range of products produced and, to a lesser extent, the nature of ownership. Through a
system of fiscal incentives and institutional supports, the government has sought to
encourage both local and foreign manufacturers to establish companies. From the early
post-war period until 1966, production was limited to food processing, beverages and
tobacco, furniture and garment operations. These were largely locally owned and catered to
the domestic and regional markets. Since 1966, the production of clothing, paints, paper
products and furniture intensified. During the early 1980s, food and beverages, electronic
components, garments and chemicals dominated the manufacturing sector in terms of output,
employment and exports (see Downes, 1985). These industries are characterized by a high
degree of foreign control and ownership and by enclave operations which formed
part of the international network of transnational corporations.

Productive activity in the manufacturing sector was adversely affected
by the decline in economic activity within CARICOM in the 1980s. In addition, several
major electronic components assembly plants (Intel, MicroData, CORCOM and Semi-Conductor)
closed their operations. For example, the industrial production index for electronic
components declined from 141.0m in 1984 to 46.8m in 1988. Production in this sub-sector
has been very low since the late 1980s. Activity in the wearing apparel sub-sector has
also declined tremendously since the mid-1980s. In 1984, the production index for wearing
apparel was 110.7 while in 1998, it was 8.8. The main areas of activity in the
manufacturing sector today are food, beverages and tobacco, non-metallic products, data
processing and miscellaneous manufacturing. The sector has been under severe pressure from
competing imports, especially from Trinidad and Tobago and Jamaica.

The domestic market has been the main sales point for manufacturers.
Approximately 80 per cent of total value of goods produced and sold took place in the
domestic market in 1994. Barbadians largely own the enterprises, with a few non-Barbadian
companies in food processing, garments, chemicals and information services. Many of these
locally owned enterprises are small and medium-sized. Raw materials account for 4.4 per
cent of total production costs in the manufacturing sector, while labour costs account for
18 per cent. General and administrative costs make up 22 per cent of production costs.
Efforts to enhance competitiveness in the sector must therefore focus on production and
operations management.

The tourism sector has witnessed significant growth and change since
the 1950s. The government has sought to promote the sector as a major foreign exchange
earner through the granting of fiscal incentives (e.g., Hotel Aids Act). During the early
stages of tourism development, tourists came mainly from the United States and the
Caribbean. Since 1966, the promotional activities of the various Government agencies and
private enterprises have resulted in a significant degree of market diversification.
Tourist arrivals from CARICOM countries have declined significantly, while arrivals from
European markets have increased. In 1965, approximately 30 per cent of tourist arrivals
were from CARICOM countries, while in 1995, the percentage was 13.3. Arrivals from United
Kingdom and other countries increased from 20 per cent in 1965 to almost 50 per cent in
1995. The proportion of arrivals from the United States declined significantly over the
1965-95 period [see Table 2.7]. Over the period 1965-95, the average annual growth rate of
tourist arrivals was 5.8 per cent. Cruise ship tourist arrivals have witnessed a
significant increase since the mid-1960s. In 1966, 51,593 cruise ship tourists came to
Barbados, while in 1995, 484,670 tourists visited the country, that is, an average arrival
growth rate of 6.7 per cent. Cruise-ship visitors have now outstripped long stay visitors
[see Table 2.8]. Many of these cruise-ship visitors originate from the United States. The
average length of stay and the hotel bed and room occupancy rates have fluctuated markedly
over the 1966-95 period.

In recent years a significant amount of refurbishing of the hotel plant
has been taking place. The Government has taken over a number of small hotels under a
Gems of Barbados project. These hotels were indebted to the former
government-owned Barbados Development Bank. Several privately owned hotels have extended
their plant as part of a major tourism development drive.

In the services sector, the Government has been actively promoting the
country as a centre for the establishment of international financial and business
services. Legislation has been passed to enable the establishment of international
business companies (IBCs), foreign sales corporations (FSCs), exempt insurance and
management companies, offshore banks and societies with restricted liability. By the end
of 1998, there was an estimated 6199 offshore companies licensed in Barbados, with
approximately 91 per cent being IBCs and FSCs. The development of the telecommunications
system and other facilities has been integral to the growth of the new
services sector. Information services (data processing, software development) also
expanded in the 1990s. For example, employment in the Barbados Investment and Development
Corporation (BIDC)-assisted enterprises increased from an average of 1123 in 1989 to 2412
in 1998. There has also been a slight increase in professional and technical services
under the aegis of the BIDC.

The evidence suggests that there has been moderate growth and
significant structural changes in the economy of Barbados since the mid-1960s. Government
involvement in economic activity has been largely parametric. It has provided the
necessary policy and institutional framework for the private sector development in the
country. In addition, the Government has sought to improve the socio-economic
infrastructure (health, education, transportation and public utilities). For example,
government capital expenditure (in current prices) increased from Bds $111m in 1966/67 to
Bds 254m in 1997/98, that is, an average annual growth rate of 10.2 per cent. Real GDP
increased by a modest 2.6 per cent per annum over the 1965-98 period. There have been
periods of recession in the economy induced primarily by external factors. The economy has
witnessed significant inter- and intra-structural changes since the 1960s. Agricultural
production has declined in importance, while the services sector has become dominant.
Barbados has therefore made the transition from an agricultural-based economy (i.e., sugar
production) to a services-based economy (i.e., tourism, financial and business services).
There is some evidence that the informal sector has grown in the country [see
Prescod, 1986; Small, 1993]. In addition, there has been a considerable expansion of the
number of enterprises (especially small operations) since the 1960s. As Worrell (1996)
notes there has been significant changes in the structure of firms providing business and
professional services, which has nurtured a middle-income class, who have subsequently
invested in other areas of the economy. The quality of the services provided has been
generally high by international standards (e.g., public utilities) and has resulted in the
continual expansion of other sectors of the economy.

The generation of employment opportunities in order to reduce the high
level of unemployment has been one of the main objectives of development planning and
policy in Barbados. Since the level of unemployment is the difference between the size of
the labour force and the number of employed persons, development policy has been directed
at reducing the growth of the labour force while, at the same time, generating employment
opportunities through the expansion of domestic production.

The existing level of the labour force is determined by past population
growth rates. Attempts have been made to curb the rate of population growth through a
family planning programme which was instituted in the late 1950s. Partly through the
educational programme of the Barbados Family Planning Association (BFPA), the birth rate
declined from 33.4 per 1000 in 1955 to 13.6 in 1998. The emphasis on social services
development such as health, nutrition, education and housing has resulted in a decline in
the death rate from 12.6 per 1000 in 1955 to 9.3 in 1998. The decline in both the crude
birth and death rates has led to a decline in the natural rate of population growth to
under 0.5 per cent per annum.

Emigration has historically been a major outlet for surplus
labour in Barbados. Indeed, the Government actively supported the emigration of
semi-skilled labour in the 1960s to the United Kingdom (i.e., nurses,
transport workers) in an effort to alleviate the chronic unemployment problem. In the late
1950s and early 1960s, the United Kingdom was the main destination of Barbadian emigrants.
With the passing of the Commonwealth Immigration Act in 1962, the doors to the United
Kingdom were closed. Some degree of family unification was allowed. The United States and
Canada later became the primary countries in which excess labour in Barbados sought
employment. As Ebanks and George (1975) note, emigration reduced both the size and growth
of the population through its effect on potential and actual fertility rates. Emigration
was viewed as a means whereby surplus labour could generate foreign exchange through the
remittances of these emigrants. Changes in the population over the past four decades have
resulted in the aging of the population, that is, a relative decline in the young cohorts
of the population and an increase in the older cohorts. Such a change has implications for
the financing of the national pension scheme and the capacity of the health care system to
cope with the demands of the elderly [see Downes, 1998].

Between 1965 and 1998, the labour force grew from 93,300 to 136,300
persons, that is, an average annual growth rate of 1.3 per cent [see Table 2.9]. The
percentage of the adult population in the labour force, that is, the labour force
participation rate, has however remained relatively constant over the post-independence
period. In 1965, the participation rate was 65.2 per cent, while in 1980, it was 65.9 per
cent, and in 1998, 67.7 per cent. The labour force participation rate for females however
increased significantly from 49.2 per cent in 1965 to 62.0 per cent in 1998. The male
participation rate declined moderately from 86.2 per cent in 1965 to 74 per cent in 1998.
There was a general narrowing of the male-female labour force participation rate
differential over the period, from 1.75 in 1965 to 1.19 in 1998. The increase in the
female participation rate since the 1960s can be attributed to several factors, namely,
improved educational and training opportunities for females, thus boosting their human
capital, the expansion of economic activity in selected areas of the economy (i.e.,
information services, banking, insurance and finance, distribution), the establishment of
day-care services and the increasing use of modern household production technology, which
releases time from household production activities.

An examination of the educational attainment of the labour force
indicates that over 50 per cent of the force have attained secondary level education,
while approximately 40 per cent have at least primary level education. Although enrolment
rates at the primary and secondary school levels are relatively high, since children must
attend school up to the age of 16 years, there is still a concern about the relatively low
degree of certification among labour market participants. In 1990, it was estimated that
approximately 60 per cent of the school population left the system without any
certification. The Government has sought to enhance the skill base of the school leaving
population by organizing a number of technical and vocational education and training
(TVET) programmes. For example, a TVET Council has been established to coordinate the
provision of training in technical and vocational areas. In addition, the Vocational
Training Board organizes skills training and apprenticeship programmes [see Parris, 1998].

The employed labour force increased from 81,100 persons in 1965 to
119,600 in 1998, that is, an annual average growth rate of 1.3 per cent. An examination of
the trend in employment since the 1960s indicates that it has been influenced primarily by
change in output. This has been confirmed by econometric analysis [see Downes, Mamingi and
Antoine, 2000]. Declines in employment were observed during the 1982/85 and 199293
periods. More males than females are employed, although the male-female employment ratio
declined from 1.47 in 1965 to 1.17 in 1998.

Historically, the agricultural sector was the main employer of labour
in Barbados. Since the 1960s, there has been a secular decline in both the absolute and
relative levels of employment in the agricultural sector. In 1965, approximately 22,800
persons were employed in the agricultural sector (i.e., 28 per cent of the employed),
while in 1998, only 5,200 or 4.3 per cent of the employed earned their living in the
agricultural sector [see Table 2.10]. The attempts in the 1960s and 1970s to diversify the
production structure of the economy resulted in an early emphasis on import substitution
in the manufacturing sector. With the limited domestic size of the market being unable to
provide enough employment opportunities via import substitution, the Government actively
promoted export manufacturing (e.g., garments, chemicals in the 1960s and 1970s,
electronic components in the 1980s and data processing/software development in the 1990s).

The services sector has however become the main absorber of labour in
Barbados. Wholesale and retail trades, general private and government services employed 52
per cent of the employed labour force in 1998. When the export-oriented services sector
 tourism and financial  are considered, employment in the services
sector accounted for an estimated 70 per cent of the employed.

Table 2.10

Sectoral distribution of employment 1965-98, both sexes (%)

SECTOR

1965

1970

1976

1980

1985

1990

1995

1998

Sugar/other Agriculture

27.8

17.7

9.8

9.2

8.5

6.2

4.6

4.3

Construction/Quarrying

9.7

13.2

8.7

8.2a

7.7

9.1

8.0

10.4

Manufacturing

10.9

13.4

15.2

15.0

13.0

11.2

10.6

8.9

Electricity/Gas/Water

1.4

1.3

0.8

0.9

2.5

1.4

0.9

1.1

Wholesale/Retail

17.6

14.6

19.0

n.a

21.8

15.6

15.1

15.2

Tourism

n.a.

n.a.

n.a

20.9b

n.a

4.8

10.8

11.5

Transport/Communication

6.3

5.5

6.0

5.9

5.5

6.2

4.6

4.3

Financial Services

n.a

n.a

n.a

3.2c

3.4

3.5

6.9

6.3

General Services

14.7

34.3cd

40.5c,d

n.a

37.6

16.3

17.6

16.6

Government Services

11.3

n.a

n.a

36.8

n.a.

20.7

20.8

20.5

TOTAL

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Notes: a construction and mining; btrade
and tourism; cfinance and business services; dincludes government
servicesSource: Barbados Statistical Service

The private sector provides the bulk of the employment in Barbados. The
number of private sector employees grew from 64,300 in 1981 to 71,800 in 1995, accounting
for over 60 per cent of the employed labour force. However, the Government has been the
largest single employer of labour in the country, accounting for the employment of
approximately 24,000 persons. A noticeable trend has been the number of employed
classified as employer or self-employed. Since the mid-1980s,
there has been a growth in this category, from 9,300 persons in 1984 to 14,000 in 1995.
This category contains both informal labour market workers and professionals and probably
reflects a growing entrepreneurial class in Barbados.

Unemployment rates in Barbados have historically been high compared
with several other countries. An unemployed person in Barbados is defined as one who is
available and looking for work but unable to find any form of work during a three-month
period immediately preceding the date of enumeration. Based on this definition, the total
number of unemployed persons declined from 16,200 in 1976 to 12,400 in 1981. The number of
unemployed persons then reached a peak of 32,300 in 1993 during the period of structural
adjustment in Barbados. Since the end of the stabilization programme there has been a
steady decline in the number of unemployed persons. A noticeable feature of the employment
trend is the fall in the number of unemployed during periods of national elections (1981,
1986 and 1995), which provide some evidence of a political business cycle [see Figure
2.2].

Over the period 1976 to 1998, the unemployment rate ranged between 10.8
per cent (1981) and 24.3 per cent (1993). As indicated earlier, the unemployment rate
reached its highest levels during the period of structural adjustment, 1992-1994. During
this period the rate was over 20 per cent. The unemployment rate for females has always
been higher than the rate for males. Over the 1996-98 period, the rate for females ranged
between 13.1 and 30 per cent, while that for males ranged between 6.4 and 27.6 per cent.

Like several other developing countries, Barbados has a youth
unemployment problem. In 1985, the unemployment rate among the 15-19 years age group was
53.3 per cent, while that for the 20-24 years age group was 30.9 per cent. In 1995, the
unemployment rate among the 15-19 years age group was 52.9 per cent and among the 20-24
years age group was 31.1 per cent. During the recession of 1991-1993, the unemployment
rate for the 15-19 years age group was more than 60 per cent. Youth unemployment is
particularly severe among females, with a rate of over 60 per cent for the 15-19 years age
group during the 1990-95 period [see Downes, 1998].

More than 70 per cent of the unemployed have received at least
secondary level education. Given that approximately 60 per cent of the school population
leave school without any certification, it is expected that the human capital base amongst
the unemployed would be weak. Indeed, recent research indicates that the shortage of
skilled human resources is one of the main concerns of business. The high level of youth
unemployment, coupled with the high incidence of uncertified workers, suggests a
mismatch problem associated with a dysfunctional education system.

One significant feature relating to the nature of unemployment in
Barbados is the long duration of unemployment experienced by some persons. The modal range
for the duration of unemployment is six months to a year. In 1966, for example, 34 per
cent of the unemployed labour force was in this state for more than one year. This
situation represents a significant degree of hard core long-term unemployment, which
appears to be more prevalent among females. Although Barbados has an unemployment
insurance scheme, its eligibility requirements mean that a number of unemployed persons
have no source of income. Many of them have to rely on a household sharing mechanism or on
the state welfare assistance system. In some cases, the unemployed seek periodic
employment in the informal labour market in such activities as vending, car washing,
gardening and illegal trading.

The government has established skill-training programmes to train young
school leavers in a range of technical and vocational areas. The Barbados Vocational
Training Board and the Technical and Vocational Educational and Training Council are the
main institutions providing offering programmes geared towards the supply of appropriate
skills for the labour market. Tertiary institutions such as the Samuel Jackman Prescod
Polytechnic and the Barbados Community College also offer training programmes for young
persons [see ILO, 1999]. While the government has provided employment in its various
operations, its focus has been on enhancing the skill base of the labour force through
educational and training programmes.

An assessment of the labour force, employment and unemployment in
Barbados since the 1960s indicate significant changes in the nature of employment
activity, the quality of the labour force and the degree and nature of unemployment. The
reduction of unemployment has been a key goal of development policy over the years.
Although the Government has provided direct employment opportunities, its approach to
employment creation has largely been facilitatory, with the private sector being the main
absorber of labour [see ILO, 1999].

Although the reduction of inequality in the distribution of income and
wealth and the eradication of poverty have been identified as major development objectives
little information is available on the extent to which inequality and poverty have changed
over the decades. Studies on the extent of inequality have been sporadic and inconsistent
in the definition of income. No study has been undertaken on the distribution of wealth,
while only one study has been undertaken on poverty.

Taking into account the differences in the definition of income,
studies of the distribution of household income indicate that there may have been a modest
increase in overall inequality between 1951/52 and 1978/79, and some reduction in
inequality between 1978/79 and 1996/97. While differences in the definition of income
makes this conclusion very tentative, a good general conclusion which can be reached from
all the studies is that there has been a redistribution of individual and household income
towards the middle 40 per cent of the income units, especially during the 1970s. Recent
data (1996/97) suggest some redistribution towards the lowest 40 per cent. The data
clearly indicate a fall in the share of individual and household income for the top 20 per
cent of the income units. In 1951/52, the top 20 per cent of households had 52.9 per cent
of total household income, while in 1978/79 and 1996/97, this group had 51 and 46.8 per
cent, respectively [see Table 2.11].

Notesa based on gross household income obtained from household Budget surveys
(see source 1).b based on pre-tax income obtained from income tax returns (see sources 2 and
3)c income recipient refers to individuals who receive income of any kind,
including transfer income and
social security benefits. Economically active population refers to the labour
force. Data obtained
from population census (source 4)* Gini coefficients for household and individual income are calculated by a
numerical approximation
procedure, while those for income recipient and economically active
population are calculated by the
regression method (see source 4)e These are average Gini coefficients (see Source 3)f refers to GDP per capita in US $Sources: 1 Downes (1987); 2 Cox (1979); 3 Holder and Prescod (1984); 4 Jain (1975).

The income distribution data also show that between the early 1950s and
the late 1970s, the distribution of pre-tax individual income improved consistently over
time as per capita income increased [see Holder and Prescod, 1984]. One study by Cox
(1979) found that between the period 1970 and 1974, the lowest incomes were found in
agriculture, manufacturing, retail and wholesale trades and hotel services. The
middle income group was found primarily in the public and commercial sectors,
while the highest income group consisted mainly of persons in the professional
and financial services sub-sector as well as among investors in agriculture and general
trading.

Although a detailed historical analysis would be needed to determine
the factors affecting the change in the distribution of income over time, some of the
factors which can be considered are the introduction of a progressive tax structure which
has reduced the overall level of post-tax income, the improvement in human capital
(education and training), which has resulted in better employment opportunities and high
incomes, the government social security schemes which provide transfer payments for the
lower income persons and remittances from abroad which would have had a significant effect
on the distribution of household income. As indicated earlier, emigration has played a
very significant part in the economic life of the country as it provided an outlet for the
high level of surplus labour and a source of foreign exchange through remittances. In
recent years, with the decline of emigration, there has been a steady return of past
emigrants and their families.

Only one study exists on the extent of poverty in Barbados [see Diez de
Medina, 1997]. There have been estimates of head count poverty in Barbados produced by the
World Bank and the Inter-American Development Bank (IDB). For example, Psacharopoulos
(1993) used a regression analysis interpolation procedure of available data for a series
of countries on poverty and per capita income to state the proportion of the rural
population in poverty increased from 10.5 per cent in 1980 to 21.1 per cent in 1989, while
urban poverty moved from 4.9 per cent to 2.3 per cent over the same period. The IDB
estimated that approximately 8 per cent of the population were living in poverty in the
early 1990s [see Diez de Medina, 1997].

To date, Diez de Medinas study offers the most comprehensive
analysis of poverty in Barbados. The essential conclusions of his study are as follows:

The mean value of the poverty line for the whole population in 1996 was estimated at Bds
$5,290 (US $2,645) per capita. The poverty line is based on the minimum requirement of a
nutritional food basket plus selected non-food items. The poverty line varies from Bds
$5,067 to Bds $5,431 depending on the age and sex composition of the household. Hence the
poverty line was set at Bds $110 per week for each person.

It was estimated that 12.7 per cent of all households were below the poverty line which
represents 10,500 households or 20 per cent of the population in 1996.

The pattern of income distribution is quite equal by international standards with a Gini
coefficient of 0.41 in 1996. The top 10 per cent of the households received 32.1 per cent
of total household income compared with 2.2 per cent for the bottom 10 per cent.

More than 66 per cent of total income consisted of wages and salaries in cash and kind.

Poor households (i.e., those below the poverty line) were larger (i.e., 5.4 persons
compared with 2.7 persons for the non-poor), primarily female-headed and characterized by
a large number of children. Poor households tend to have younger heads.

The link between female-headed households and poverty can be partly related to the high
level of female unemployment, job discrimination and other social factors.

The human capital base of the poor (i.e., level of education and skill) is quite low. It
however seems that poor households invest more than non-poor households in education which
is perceived as a means of breaking the chains of poverty.

The female participation rate is higher for poor households than non-poor households and
reflects the need for women in female-headed households to enter the labour market to
provide income for the household.

The unemployment rate is highest among poor households and particularly affects the
young cohorts and females.

Poor households tend to make great use of the secondary (or informal) labour market.

Employed males from poor households find low-paying jobs in such sectors as construction
and quarrying, manufacturing and general services, while females work in general services,
tourism and distribution. This reflects some degree of labour market segmentation.

Unemployment spells are much longer for poor females than for males.

A large proportion of the employed from poor households work in private sector
enterprises or are self-employed in the informal sector.

"Labour market constraints and low level of skills are still very closely related
to the poverty status, revealing a segmented market where low productivity and lack of
interaction with modern sectors prevent a number of households from escaping from
poverty" (p. 33).

The general results from the studies indicate a strong link between
poverty and labour market conditions. The poor households have low human capital which
means that they can only obtain low paying jobs in a highly segmented market or remain
unemployed [see Downes, 1999].

Social indicators of development suggest that poverty is not a severe
problem in Barbados as in other countries. There is however a need to establish a poverty
monitoring system, so that the impact of social and economic policies on the distribution
of income and poverty can be assessed.

The maintenance of a stable macroeconomic environment is an important
aspect of the development planning process. In effect, short-run macroeconomic management
must complement long-run development policy initiatives. A stable macroeconomic
environment would involve low rates of inflation, low levels of internal and external
debt, balance on the fiscal and balance of payment accounts, a stable exchange
rate regime and appropriate trade policies. Within this macroeconomic environment, the
Government would be able to achieve its long-term objectives of a low rate of
unemployment, economic growth, equity in the distribution of income and wealth, the
reduction/eradication of poverty and effective social services.

The inflationary experience of Barbados has been studied extensively
[see Cumberbatch, 1997 for a survey]. Econometric analyses of inflation since the 1960s
point to the strong influence of cost-push elements such as import prices and,
to a lesser extent, labour costs and the credit rate. Demand-pull factors such
as increases in the money supply or government expenditure are not important drivers of
inflation. These factors tend to affect the Balance of Payments moreso than the inflation
rate in a small, open developing economy such as Barbados since excess aggregate domestic
demand is satisfied by imports.

An examination of the inflationary experience since the 1960s point to
two major episodes of high inflation rates in Barbados: 1969-1975 and 1979-1982. Both
periods of inflation were influenced by external shocks, namely the increase in commodity
prices in the late 1960s and early 1970s and the rise of oil prices in 1973/74 and again
in 1979/80. During the 1973/74 oil crisis the inflation rate rose to its
highest value in the history of Barbados - 39 per cent. Barbados recorded double-digit
inflation during these two periods (1969-75 and 1979-82) [see Figure 2.3].

The other periods when inflation was an economic concern were:

In 1967 when the pound sterling to which the Barbadian (Eastern Caribbean) dollar was
tied was devalued

In 1991-92 when taxes and other commodity prices were increased in the wake of the
structural adjustment programme and,

In 1997 when the value-added tax (VAT) was introduced

These events were associated with short spurts of moderate inflation,
that is 6 to 8 per cent. Other periods have been associated with mild inflation rates,
that is, less than 5 per cent. In 1998, Barbados experienced a negative rate of inflation
for the second time in the past 60 years.

Barbados relatively stable inflation rate history can be partly
attributed to its exchange policy. The country has maintained a fixed exchange regime with
its main trading partners over the years. Because of its colonial background, Barbados
maintained a fixed exchange rate between the pound until July 1975 when it switched its
peg to the United States dollar. Prior to 1975, the exchange rate between the pound
sterling and the Barbadian dollar was Bds $4.80 to one pound. During the early period of
1975, the value of the pound began to increase against the US dollar, thus making imports
from the United States more expensive. A decision was therefore taken to tie the Barbadian
dollar to the United States dollar thereby revaluing the Barbadian dollar. The fixed
exchange policy adopted by the Barbadian Government has been an anchor for the inflation
rate. Increases in foreign prices of goods and services would therefore be the main
influence on the inflation rate. Estimates of the extent of overvaluation of the Barbadian
dollar vis-à-vis the United States dollar during the economic crisis of the early 1990s
point to a moderate level of overvaluation. If the ratios of the retail price indices of
Barbados to United States as a measure of the real exchange rate (assuming that the
nominal exchange rate is fixed), then it is noted that the ratio rose between 1976 and
1998. This suggests some degree of overvaluation relative to 1976 and hence loss of
competitiveness to the United States economy [see Table 2.12]. The exchange rate policy
has also curbed speculative activity associated with exchange rate expectations and
capital flight. IMF estimates of the real effective exchange rate between 1986 and 1998
suggest a cyclical pattern of depreciation and appreciation. Depreciation in the rate
occurred during the periods 1986-88, 1990-91 and 1993-95, while appreciation occurred
during the other periods. The extent of depreciation and appreciation varied between 2 per
cent and 15 per cent over the period [IMF, 1998].

Between the fiscal periods (April-March) 1965/66 and 1998/99,
government current expenditure rose from Bds $32.5m to Bds $1,332.9m, that is, an annual
average growth rate of 11.5 per cent. Capital expenditure grew from Bds $10m to Bds
$256.8m, that is, an average annual growth rate of 10.2 per cent. Comparing these growth
rates with the inflation rate over the period, it can be stated that real government
expenditure increased over the post-independence period.

Wages and salaries have traditionally been a major component of the
governments current expenditure, that is, between 45 and 60 per cent. Current
revenue increased from Bds $38.5m to Bds $1545.0m over the period, that is, an average
annual growth rate of 10.6 per cent.

Since independence in 1966, the Government has recorded a deficit in
its current account (i.e., government dis-saving) on four occasions (1973/74, 1976/77,
1987/88 and 1990/91). Given the excess growth of overall expenditure over revenue,
Barbados has a chronic (structural) deficit on the overall fiscal account. The overall
fiscal deficit has varied from Bds $1.4m (1968/69) to Bds $248.2m in 1990/91. The fiscal
deficit to current GDP ratio which measures the amount of resources which the Government
would have to extract from the economy to close the fiscal gap varied between 2 and 9 per
cent during the post-independence period.

The history of fiscal deficits in Barbados provides evidence of a
political business cycle. There are spurts in the overall fiscal deficit (due to increases
in expenditure) around election time (1966, 1971, 1976, 1981, 1986 and 1995) [see Table
2.13]. There is also a pattern of periods of high government savings (i.e., current
account surpluses) followed by a period of high overall fiscal deficits. For example, a
high level of savings in 1971/72, 1975/76, 1978-81, 1983/84, 1988-90 and 1995/99 were
followed by high deficits in 1972/74, 1976/77, 1981-83, 1984/85, 1990/91 and 1996/97,
respectively. While it is expected that government savings would be used to finance
capital works projects, much of this activity occurred during pre-election periods.

Fiscal policy has been directed towards enhancing the economic
development process and providing for the social welfare of the population. Through the
tax-expenditure mechanism, the Government has been able to engage in social and economic
engineering as it sought to manage short-run economic changes and provide for long-term
social and economic development. The governments tax policy has been geared towards
the provision of social services (education, health, housing), (that is, training and
health levies), the redistribution of income, the encouragement of saving and investment,
the promotion of entrepreneurship, the development of small business and the promotion of
exports. It has also been targeted at reducing the level of imports [see Downes, 1989].

Its expenditure policy has been geared towards the provision of social
infrastructure services and economic services. In 1965/66, social services (health,
education, housing and community services) accounted for 53 per cent of current
expenditure and 15 per cent of capital expenditure [see Tables 2.14 and 2.15]. In 1995/96,
the share of social services expenditure in total current expenditure was 50 per cent,
while the share in capital expenditure was 35 per cent. In the case of economic services
(agriculture, water, roads, trade, industry and tourism), the share in current expenditure
moved from 20 per cent in 1965/66 to 12 per cent in 1995/96, while the share in capital
expenditure fell from 85 per cent in 1965/66 to 34 per cent in 1995/96. Social expenditure
increased from 10 per cent of GDP in 1965/66 to 15 per cent in 1995/96, while economic
expenditure fell from 10 per cent of GDP in 1965/66 to 5 per cent in 1995/96. The
expansion of the social and economic services provided by the Government has contributed
significantly to the improvement in the socioeconomic welfare of the population.

The provision for the general public services has accounted for
approximately 18 per cent of current expenditure, while the provision for debt moved from
8 per cent in 1965/66 to 18 per cent in 1995/96. The national debt (that is, the direct
borrowing of the Central Bank  treasury bills and notes, debentures, advances from
banks and project loans) rose from Bds $52.1m in 1967 to Bds $2816.0m in 1998, that is, an
average annual growth rate of 12.7 per cent. During the period 1967-1997, the Government
depended on the domestic market for the financing of its debt. The domestic component of
the national debt increased from 46 per cent in 1967 to 84 per cent in 1977 [see Table
2.16]. Less reliance was placed on the domestic market during the 1978-88 period as the
domestic component of the national debt fell from 76 per cent in 1978 to 50 per cent in
1988. Since 1989, the domestic component of the national debt has been on an upward trend.

An important feature of the post-independence fiscal policy stance has
been the use of the Central Bank (established in 1973) and the National Insurance Board to
finance the fiscal deficit. Excessive borrowing from the Central Bank (i.e., monetary
creation) in 1981-82 and 1989-91 was partly responsible for the deterioration in the
international reserves of the country and thus the need to borrow from the International
Monetary Fund (IMF) in 1982 and 1991. The high fiscal deficits during the 1985-1988 period
were financed via excessive foreign borrowing which increased the Central Government's
foreign component of the national debt and also its debt servicing ratio.

During the post-independence period, there have been shifts in tax
policy. First, there was a marked switch from direct to indirect taxes during the 1984-87
period. Secondly, a number of special levies were imposed on individuals and companies
 health, training, transport and employment during the 1982-93 period. Finally, tax
reform was introduced in the 1990s with the streamlining of the direct (personal
income) tax system and removal of several of the levies and the indirect tax system
with the introduction of a VAT in 1997 and the removal of several indirect taxes.

The maintenance of BOP equilibrium can be considered as the most
important macroeconomic issue in a small developing country such as Barbados. Given the
high degree of openness of the economy, small external shocks can have major repercussions
on the economy. Barbados has always maintained a fixed exchange rate regime with its main
trading partner (i.e., United Kingdom up to 1975 and United States since 1975). In effect,
the nominal exchange rate has been used as a policy anchor.

An examination of the post-independence BOP performance indicates that
Barbados has had a chronic or structural balance of visible trade deficit (that is,
imports of goods have always exceeded the export of goods). Due to the growth of the
services sector, namely, tourism, the balance on current account has been in a surplus
position at three junctions of the development of the economy: 1984-86, 1988-89 and
1992-96. The cutback in the import of goods also contributed to the realization of a
current account surplus during these three periods.

Since 1970, Barbados has experienced five periods of BOP problems, that
is, significant BOP deficits: 1970, 1973, 1976, 1981 and 1989-91 [see Table 2.17]. The
last period was the most severe and required major economic engineering. Barbados has had
to seek balance of payment support from the IMF on three occasions: In 1977, it received a
loan of Bds $15.1m from the Compensatory Financing Facility (CFF) to cover an export
shortfall. This loan had no conditionalities. In the 1982-83 programme with the IMF, both
a CFF loan and a standby loan were sought. The total loan of Bds $97.1m was accompanied by
minor conditionalities The 1992-93 programme was however "preceded by
severe external disequilibrium requiring a faster pace of adjustment and involving a mix
of macroeconomic and structural measures" [Haynes, 1997, p.86]. The CFF and Standby
loans amounted to Bds $102m and covered a 16 months period compared with the 20-month
period of the 1982-84 loan.

Table 2.17

Balance of payments, 1965-97 (Bds $m)

Year

Balance of
Visible Trade

Current Account
Balance

Capital Account
Balance

Balance for
Official Financing

Changes in
Reserves

1965

-61.1

-25.1

10.6

5.1

-5.1

1967

-72.6

-30.0

10.5

10.5

-10.5

1969

-128.4

-58.8

24.4

-42.9

42.9

1971

-178.1

-69.3

36.4

11.0

-13.8

1973

-234.9

-102.4

43.0

-25.6

255.6

1975

-246.9

-83.8

56.7

31.2

-31.2

1977

-374.4

-101.2

55.4

-5.9

-29.3

1979

-450.1

-60.0

40.4

16.5

-15.9

1981

-674.2

-230.8

279.6

-79.7

45.8

1983

-505.4

-71.1

119.2

10.7

-40.0

1985

-417.6

119.3

42.8

85.3

-78.6

1987

-588.7

-32.6

205.5

15.3

30.7

1989

-832.9

56.4

-45.0

-83.9

97.0

1991

-832.3

-47.3

51.9

104.5

81.8

1993

-635.5

140.5

8.5

49.5

45.7

1995

-891.5

1802

-62.0

73.7

-23.9

1997

-1197.2

-98.7

78.8

75.1

-43.7

Notes: (+) indicates a decrease in reserves; (-) denotes an
increase in reserves. The data are calculated on a
Central Bank basis and hence includes loans from the IMF.Source: Central Bank of Barbados: Balance of Payments (various issues) and Annual
Report (various issues).

There is a combination of forces, which has resulted in the BOP
problems experienced by Barbados since the 1960s. There is a close association between the
fiscal deficit, the financing of the deficit by the Central Bank and BOP disequilibrium.
Between 1975/76 and 1976/77, the fiscal deficit moved from Bds $21.6m to Bds $61.6m. It
further jumped to Bds $83m in 1977/78. The BOP moved from a surplus of Bds $31.2m on the
balance for official financing in 1975 to a deficit of Bds $36m in 1976.

During the 1980/81 to 1982/83 period, the fiscal deficit jumped from a
deficit of Bds $89.7m in 1980/81 to a level of Bds $154.8m in 1981/82 and Bds $120.3m in
1982/83. The BOP moved from a surplus of Bds $38.7m on the balance for official financing
in 1980 to a deficit of Bds $79.7m in 1981. Between 1989/90 and 1990/91, the fiscal
deficit increased from Bds $66.4m to Bds $248.2m, while the BOP moved from a surplus of
Bds $94.5m in 1988 to a deficit position over the 1989-91 period.

While data suggest a close correlation between the fiscal and BOP
deficit positions, the intermediary factor between these deficits is the financing issue.
Where the fiscal deficit is monetarised, that is, financed by the Central Bank (i.e., the
printing of money or increasing the monetary base), the problem is exaggerated into a
serious one. An examination of the financing of the fiscal deficit during periods of
severe BOP problems indicates that the Central Bank financing of the deficit has been the
issue. For example, the periods 1981-82 and 1989-91 were periods when the fiscal deficit
was financed by significant Central Bank borrowing. On other occasions, the fiscal deficit
was financed by commercial and IMF borrowings.

The essential lesson from the Barbadian experience is that excessive
borrowing from the Central Bank to finance a fiscal deficit (especially incurred around
election time) can result in a significant BOP problem. Monetary policy should essentially
be geared towards the maintenance of BOP equilibrium in the context of a fixed exchange
rate regime.

In addition to monetary policy measures, the Government has used
commercial policies to bring the balance of current account under some degree of control.
Prior to the introduction of a Common External Tariff within CARICOM, the Government made
use of tariffs to control imports [see Downes, 1982]. With the agreement among CARICOM
member states to introduce a common external tariff, the degrees of freedom to use tariffs
to control imports were reduced. The Government then used a mixture of import licensing
and stamp duties to control imports. The movement towards greater trade liberalization and
the creation of a single market and economy within CARICOM has resulted in the
tariffication of all restrictions of imports and the reduction or removal of stamp duties.
It is expected that tariffs will be reduced over time in accordance with the requirements
of trade liberalization. This reduced ability to use commercial policy to control the
trade aspect of the BOP means that a greater role has to be played by fiscal and monetary
policies in order to avoid severe BOP disequilibrium.

The BOP position has also been affected by changes in economic activity
in the international economy. For example, the oil shocks and subsequent recession in 1973
and 1979 resulted in a deterioration in the BOP position. The BOP economic crisis in 1991
was also partly due to the recession in the international economy. Long-term capital
inflows have been an important element in maintaining BOP equilibrium in Barbados. There
was a steady increase in net capital inflows between 1965 and 1981. The capital account
balance, for example, moved from Bds $10.6m in 1965 to Bds 4279.6m in 1981. Since 1981,
capital inflows have been somewhat erratic with three periods of capital account deficits:
1989, 1992 and 1995. Except during those crisis periods associated with fiscal excesses
financed by the Central Bank and external shocks to the economy (recession and oil price
increases), the BOP of Barbados has been kept under some degree of control.

Probably the most testing period for economic management in Barbados
was associated with the fiscal and BOP crisis of 1989-91 and the subsequent introduction
of an IMF-assisted structural adjustment programme in 1992-93. This programme consisted of
both short-run stabilization policies to curb aggregate demand and medium to long run
structural reforms to boost aggregate supply. The 1989-91 period was characterized by:

A significant increase in the overall fiscal deficit

The financing of the fiscal deficit by excessive borrowing from the Central Bank

A moderate increase in inflation

A drop in the foreign reserves (especially in 1991)

A fall in real output; and

An increase in unemployment

The international economy (especially Canada, United Kingdom and United
States) was also experiencing a decline in economic activity during the 1989-91 period
[see Table 2.18].

The severe economic situation facing the Barbadian economy forced the
Government to seek BOP support from the IMF. This support for Bds $102m was accompanied by
a number of conditionalities. The Government adopted a macroeconomic policy framework
which involved a tight monetary and fiscal policy stance using the nominal exchange rate
parity with the United States dollar as a policy anchor.

The main economic policy and reform measures of the programme are
outlined in the Governments Letter of Intent to the IMF (October 1991) and the
Financial Statements and Budgetary Proposals (2 April 1991, 16 September 1992, 31 March
1992 and 15 March 1993). The stated objectives of the programme were to:

Cure the shortage of foreign exchange

Improve external competitiveness by removing the disincentive to export

Encourage the efficient allocation and use of resources

Restore financial stability

Improve the conditions for the resumption of sustainable economic growth

The stabilization policies introduced during the 1991-93 period
involved:

The use of nominal exchange rate as a policy anchor

The reduction in nominal government expenditure primarily through a cut in the wages and
salaries of public sector employees by 8 per cent over the period September 1991 to April
1993, a reduction in the purchase of goods and services and a cutback in transfers and
subsidies

Increases in taxes and user charges and the removal of concessions, especially to the
manufacturing sector

The adoption of a tight monetary policy stance  increased interest rates, credit
restrictions and a reduction in Central Bank lending to the Government

The introduction of an incomes policy in 1993 which called for a freeze in basic wages
and salaries for a period of two years in both the private and public sectors and

Provision for the payment of productivity bonuses and profit-sharing schemes

The reform programme involved tax reform (the reduction of direct
taxation and the introduction of a value added tax), trade and tariff reform (the
reduction of common external tariff), financial reform (i.e., greater financial
liberalization via the relaxation of exchange controls, financial deregulation), public
sector administrative reform, a divestment/privatisation programme and the reform of the
productive sectors (sugar, tourism and manufacturing).

Both the stabilization and reform programmes provided the basis for the
resumption of economic growth in 1993 after three years of economic decline. Real GDP
declined from Bds $909m in 1989 to Bds $791.9m in 1992, that is, an average annual rate of
decline of 4.5 per cent. Real GDP rose from Bds $803.9m in 1993 to Bds $961.8m in 1998,
that is, an average annual growth rate of 3.6 per cent.

An important aspect of the structural adjustment programme was the
agreement among the Government of Barbados, the private sector representatives and the
labour unions (that is, the Social Partners) to establish a Protocol on the
Implementation of a Prices and Incomes Policy in Barbados. The first
Protocol (April 1, 1993 to March 31, 1995) contained the following elements:

A general freeze on increases in basic wages and salaries for a two-year
period. Exemption from this agreement would apply only where wages were deemed to be
substandard by the Social Partners. A freeze also applied to all other forms of employment
income;

Any increases in wages and salaries during the period would be based on profit sharing
and productivity increases;

A review and monitoring of pricing policies so that price increases would be limited to
legitimate cost increases;

The establishment of a tripartite National Productivity Board to support the objectives
and agreements in the Protocol;

The maintenance of the collective bargaining process to address issues such as the
conditions of work and the sharing of productivity gains.

The Social partners agreed to extend the Protocol for another two years
(April 1995 to March 1997). The main features of the second Protocol were:

The linking of price increases to unavoidable or legitimate cost increases,

Linking increases in wages and salaries to increases in productivity, profit and other
measures of organizational performance,

The greater use of employee share ownership schemes,

The strengthening of the administrative machinery governing the operations of the
Protocol,

These two Protocols were integral to the economic recovery. The main
objectives of these Protocols were to:

Ensure the existing parity of the Barbadian dollar with the US dollar was maintained
(i.e., the avoidance of a devaluation),

Improve price competitiveness in the international market via the reduction in the real
unit cost of labour,

Increase employment opportunities,

Promote a national commitment to improved productivity and increased efficiency in the
country,

Enable workers and employers to contribute more to national and organizational planning
and policy making,

Maintain a stable industrial relations climate.

The third Protocol (1998-2000) focuses on strengthening the
Social Partnership and extends the objectives of the previous Protocols to incorporate a
consolidation of the tripartite consultation process, reduction in social disparities and
the restructuring of the economy. This Protocol provides for such matters as employment
creation and conditions, training, crime, public sector reform, persons with disabilities
and child labour. The commitments of the three partners to the Protocol are also spelt out
in this third Protocol.

The establishment of these Protocols and a National Productivity
Council since 1993 has been a very unique aspect of macroeconomic management in Barbados.
The agreements have been significant in maintaining economic, social and political
stability in the country. Barbados has been able to emerge from a serious balance of
payments crisis without devaluation. The adoption of a prices and incomes policy has been
important in enhancing productivity and competitiveness. A number of companies have
implemented productivity gainsharing and profit-sharing schemes as a result of these
Protocols (see Downes and Alleyne, 1998). There is however a need to promote the greater
use of such performance-based payment schemes. The National Productivity Council has been
at the forefront of promoting productivity improvement and measurement schemes since its
establishment in August 1993.

The Protocols reflect three basic features of economic relations in
Barbados: a voluntaristic approach to collective bargaining or industrial relations, a
tripartite approach to macroeconomic policy making and a non-adversarial approach to
industrial relations.

Labour unions and employers have historically used a voluntaristic
approach to industrial relations. Since collective bargaining agreements are not legally
binding, parties to a dispute usually refer it to the Labour Office for conciliation. In
general, the incidence of industrial disputes has been low. Between 1991 and 1997, there
were 57 work stoppages, primarily in the sugar and hotel industries. Industrial disputes
referred to the Labour Office relate mainly to dismissals and suspensions, wages and
conditions of work and to a lesser extent, recognition of union representation.

The Protocols have promoted a sense of cohesiveness in the relationship
among the Government, private sector and the labour unions. Private sector agencies and
the labour unions have formed coalition groups: the Private Sector Agency and the Congress
of Trade Unions and Staff Associations (CTUSAB) in order to better articulate their
concerns and suggestions to the Government. For example, the labour unions have sought to
have the Government enact legislation on unfair dismissals, sexual harassment and trade
union recognition. Regular meetings are held among the Social Partner so that concerns and
suggestions can be readily acted upon. To a large extent, the approach to industrial
relations has moved from an adversarial stance to a largely non-adversarial one. The
adoption of a tripartite approach to economic and social policy making has contributed
significantly to the development of economic progress and social harmony in Barbados. The
major social concern facing the Social Partners at this time is the high incidence of
criminal activity.

The Government has put international competitiveness high on its policy
agenda with the creation of a Commission on Competitiveness chaired by the Prime Minister.
Although the data are not definitive, there is evidence that Barbados has lost its
competitive edge in the tourism sector and has held its own in the manufacturing sector
[see Worrell et al, 1996].

In summary, the structural adjustment policies and programmes
implemented by the Government in the early 1990s assisted with the recovery of the economy
in the mid- to late 1990s. There is still a number of areas of economic weakness which
need to be addressed, for example, the enhancement of the skills of the labour force,
boosting productivity and hence enhancing international competitiveness in the
manufacturing and tourism sectors, and reducing the economic vulnerability of the economy.

As a small developing country, Barbados has to be very mindful of
changes taking place in the regional and international economic environments. Within the
regional economy, the movement towards a Caribbean Single Market and Economy (CSME) by the
end of the year 2000 will prove to be a challenge for local producers. On the
international front, Barbados will have to face the impact of:

The formation of the Free Trade Area of the Americas (FTAA) by the year 2000. The FTAA
is an extension of the North American Free Trade agreement (NAFTA) which was established
in 1995 and included the UNITED STATES, Canada and Mexico. The FTAA will embrace other
Latin American and Caribbean countries;

The post-Lome IV negotiated agreement and the formation of a new African, pacific and
Caribbean (ACP)  European Union (EU) relationship. The Lome IV trade and aid pact
between the ACP and the EU expires in February 2000.

The provisions under the World Trade organization (WTO) which came into force in January
1995. The formation of the WTO brought to an end the Uruguay Round of Multilateral Trade
Negotiations and heralded in the era of trade liberalization in the global economy.

These regional and international changes will result in a new
global economy with greater trade liberalization and movement of capital and
commodities.

In 1989, the Heads of Government of CARICOM member states agreed to
move the integration process from a common market (that is, free trade in goods among
member states and the imposition of Common External Tariff on goods from outside the
region) to the formation of a Caribbean Single Market and Economy (CSME). This new
arrangement would allow for:

The free movement of commodities, capital and people (labour),

The removal of all tariff and non-tariff barriers to trade within the
region,

The harmonization of fiscal, monetary and sectoral policies,

The development of the regions money and capital market with
the ultimate establishment of a Caribbean single currency,

The right of Caribbean citizens to establish companies anywhere in
the region,

The formulation of a common approach to economic relations with
non-member countries.

The CSME would permit the more efficient use of regional resources and
enhance competitiveness in the international arena. The CSME is based on a number of
protocols:

Protocol I: Amendments to the voting arrangements, organs and
institutions of the Community to support the CSME

Protocol II: Provisions for the free movement of capital, the
provision of services and the rights of establishment for Caribbean investors

Protocol III: A policy framework for regional industrial
development

Protocol IV: The framework for a regional external trade policy

Protocol V: Provisions for agricultural development

Protocol VI: The framework for the implementation of a new
regional transportation policy

Protocol VIII: Mechanism for the settlement of regional
economic disputes

Protocol IX: Rules to provide for fair competition within the
region

The establishment of the CSME is therefore expected to result in a
better use of resources (human and non-human) within member states, the promotion of the
services sector (especially tourism), revitalization of the agricultural and manufacturing
sectors and the strengthening of the regions capabilities to negotiate international
economic agreements.

Barbados is fully committed to the establishment of a CSME and has
taken the necessary actions to bring the Protocols into effect. Furthermore, Barbados has
the administrative responsibility for matters relating to the formation of the CSME. It
has agreed to remove existing import duties, requirements for licenses and discriminatory
practices towards regional commodities. With effect from April 1, 2000, all licenses on
imported products will be abolished to conform with regional and international agreements
relating to free trade. The common external tariff (CET) has been gradually reduced to
reach a level of 5 to 20 per cent effective January 1998. Free trade within the community
has been encouraged and some degree of free movement of persons (UWI graduates, media
workers and entertainers) has been implemented. Measures are being put in place to
establish a regional accreditation and standards system.

The formation of the CSME is expected to form the basis of a strategy
to confront the rapid changes taking place within the international environment. Barbados
is the home of the Caribbean Regional Negotiating Machinery (CRNM) which has been
established by the CARICOM states to present a unified Caribbean position with respect to
negotiations associated with the next Lome Convention and the formation of the FTAA. Under
the new rules of international trade administered by the WTO, there will be:

The liberalization of trade in goods and services

The dismantling of non-tariff barriers

Reciprocal trading arrangements

No special and differential treatment for a country (except in the case of a group of
least developed countries)

Non-discrimination with respect to domestic and foreign commodities

Under the Lome and FTAA arrangements, there is the drive for greater
reciprocity in trade and the need to be WTO-compliant. These measures would make the
international economic environment highly competitive and dynamic as changes in
information and materials technologies reinforce the new trading arrangements.

Barbados has agreed to put the new international trading measures
(e.g., dismantling of non-tariff barriers) in place by the year 2004. Caribbean countries
have been seeking NAFTA parity in their negotiations under the FTAA. Gaining
such parity would ensure duty-free access for a number of exports from the region 
textiles and clothing, petroleum and petroleum products. The US Congress has however
rejected a bill proposed by President Clinton (the Export expansion and Reciprocal Trade
Agreement Act 1997) which would have sought to provide a fast track for
trading agreements such as the FTAA, which require Congressional approval. This means that
the FTAA negotiations would be more difficult and involved. Furthermore, the FTAA
agreement must conform to WTO regulations for trade.

Since 1998, Barbados ceased to have access to World Bank concessionary
funds. Coupled with the changes in the international trading arrangements and the
formation of the CSME, it is expected that by the year 2005, the economic landscape and
policy framework in Barbados would be changed. The Government has recognized these changes
and has made the period 2000-2004 one of economic transition. A number of measures have
been formulated and implemented to face the challenges of the new global economy.

A Commission on Competitiveness has been formed to oversee the removal
of public sector obstacles to doing business, to attend to the diffusion of information
technology in the economy and to oversee the implementation of the CSME. In the area of
human resources development, a major thrust is taking place in the school system where
information technology will be used as an integral part of the teaching and learning
process (i.e., Edutech 2000).

An office of Public Sector Reform has been established to ensure that
the response of public sector agencies to private sector requests is more rapid. The basic
aim is to reduce the transactions cost (explicit and implicit) associated with doing
business in Barbados. The Government has re-emphasized that it will maintain a fixed
exchange rate regime, so that the drive for international competitiveness would involve
seeking to reduce real unit costs through enhanced productivity and quality.

Fiscal policy has been directed towards the promotion of new and
replacement investment. It is recognized that in order to make business competitive,
policy measures are needed to allow businesses to retool, refurbish and recapitalize
[Financial Statement and Budgetary Proposals, 1999]. Special incentives and supports for
the agricultural, manufacturing and services sectors have been introduced  grants
and rebates and price support to the agricultural sector, duty-free concession for small
manufacturers, tariffication of non-tariff barriers, funds to support training and the
information services sector, accelerated write-off of interest on loans associated with
capital investment in the tourism sector, a special corporation tax for small businesses.

The Government has also proposed the establishment of a Fair Trading
Commission to ensure that the consumers interest is not breached in the new economic
environment. Incentives for saving and investment have been put in place. Public companies
(i.e., Barbados National Bank, Insurance Corporation of Barbados) have been restructured
so that they can be privatised).

The Government has therefore taken a measured approach to the
challenges presented by the changing regional and international economic environments. Its
trade, fiscal and industrial policies have been geared towards a gradual opening up of the
Barbadian economy while providing the institutional support and incentives structure to
allow businesses to compete in the new global economy. It has taken an indicative or
parametric approach to economic planning and management with the expectation
that the private sector will provide the impetus for growth and development, and the
Social Partnership agreement has been broadened to accommodate these changes.

Social policy is best conceptualised as systematic action directed
at influencing societal conditions. Effectively it refers to that broad spectrum of
policies in relation to a range of social areas including social security, housing,
health, education and personal social services for families and vulnerable groups such as
children, the disabled, the elderly, the unemployed etc. This generalised
conceptualisation avoids the misperception of social policy as an area of public policy
dealing with social services provided by the state. The fact is that in spite of the
predominance of the welfare state as a mode of organization for social policy during the
post-war period, there are a number of contexts in which the state is a minimal provider
of social policy programmes and where other agencies within the private, voluntary and
informal sectors make considerable provision.

Within contemporary social policy circles it is now generally accepted
that social policy may best be described as operating under a system of what has come to
be referred to as "social welfare pluralism" in which the allocation of social
services may take place through:

The State

The voluntary sector

Private initiatives

Informal agencies

Consistent with the principles of social democracy which has emerged as
the undergirding philosophy of post-independence political economy in Barbados, social
policy development has tended to most closely approximate a mix of social reformism and
Fabian socialism in which state provision is the central, though by no means exclusive
mode of social programme delivery. Accordingly, whereas much of the analysis presented
here necessarily focuses on governmental provision, the role of private, voluntary and
informal programmes and the degree of articulation with that of the state is also
examined.

Central to the political ideology of social democracy is its
dissatisfaction with what it identifies as the dysfunctional consequences of the free
market system of resource distribution. From this perspective, the free market system is
unjust since the distribution of resources, programmes and services are based on
particularistic principles; it is not self-regulating and must therefore be regulated by
government; it can never abolish poverty and inequality; and it is essentially
undemocratic since it does not foster popular participation decision-making. The social
philosophy of the social democratic political ideology is clearly expressed in the basic
principles of equality, freedom, democracy and humanitarianism which are central to its
approach to the delivery of social policy.

Equality

Within the philosophy of democratic socialism the fundamental principle
of equality means more than equality of opportunity because this only
offers the chance to compete; rather, it is felt that equality can only be achieved by
overcoming a variety of factors which stand between equality of opportunity and equality
of outcomes.

All of the leaders of Barbados in the post-independence period, across
the political "divide", from Barrow to Arthur have generally remained faithful
to this philosophic principle. Barrow himself a founding member of the Democratic Labour
Party indicated that one of the principal objectives of the party was to:

"Create and maintain a social and economic atmosphere conducive to
the enjoyment of equal opportunities and the democratic way of life by all a society
where there is equal opportunity, not (merely) opportunity but truly equal opportunity for
all to share in a rich and varied life and to develop the rich and varied life and solid
talents of the human individual." (Haniff, 1987).

The continuity of this principle is evident in the broad policy
overview in the BLP Manifesto, 1999 where the BLP leader Owen Arthur
states on behalf of the party that its mandate was to:

Create a new prosperity in which all would share to move Barbados
from strength to greater strength, with deeper unity and ever increasing prosperity for
everyone, with no one left behind.

The principle of equality which is concerned ultimately with equality
of outcomes in turn implies a commitment to redistribution and meritocracy as critical
approaches towards the realisation of distributive justice. It is this principle,
therefore, expressed in philosophical terms by the political leadership and subjected to
empirical analysis by the academic leadership such as Beckles that fueled the national
debate on "economic enfranchisement" and maintained a socio-political
environment in which this principle consistently informed social policy formulation.

From the perspective of democratic socialism there is a commitment to
the removal of social inequality since it is felt that this leads to social disintegration
and social inefficiency through the differentiation of the society and the
under-realisation of the potential of the underprivileged. Perhaps one of the best
examples of the actualisation of this philosophical principle is in the new education
policy with its theme: "Each One Matters  Quality

Education for All". The policy articulated in the White
Paper on Education Reform seeks to take the universalism of educational provision a
step further, towards equality of outcomes rather than of opportunities:

The challenge for Barbadian education is therefore one of quality
rather than access It demands the identification and resolution of those issues,
problems and concerns which perpetuate inequities in the system. The aim is not to
diminish in any way the provision of education in those schools that are of high quality.
Instead, it is to direct attention to those areas of the system which have been neglected
over the years, thus leading to an over-all increase in the quality of graduates form the
nations schools and educational institutions.

This approach has become an increasing feature of policy development in
the post-independence period, as efforts have been made to push the principles of equality
and universalism beyond their traditional interpretations.

Freedom

Freedom is an important principle and goal of social policy within
democratic socialism. It is a necessary accompaniment of equality in that extremes of
social inequality lead to inequalities of power which in turn leads to excessive control
by some people over others. Freedom therefore becomes a concern in the sense of
"freedom from". In addition, freedom in the sense of "freedom to" is
critical if people are to achieve self-actualisation. Within this framework, the
government has the responsibility to provide the social, economic and fiscal policy to
promote freedom in both senses as articulated here.

These twin philosophical ideals of "freedom from" excessive
social control and "freedom to" self actualise have underpinned much of the
recent social policy, especially in respect of the personal social services. Alongside the
economic thrust at the economic enfranchisement of the broad masses of the population has
been a drive towards poverty eradication. This drive has been couched not in the
traditional social policy terms of expanding social welfare provisions but rather in
removing the persistent elements of stigma and dependency from personal social service
delivery.

Particularly during the last decade, therefore, there has been the
establishment of an unprecedented number of Task Forces and Commissions to examine and
report on the circumstances of vulnerable social groups with a view to their fuller
participation in the socio-economic mainstream. Such social enquiries have been conducted
on youth, the disabled, the elderly and the homeless and in most cases have led to the
formulation of national policies to respond to the social circumstances identified.

The Roett & Joseph Report on the Rationalisation of the
Personal Social Services of Barbados and the subsequent creation of the Ministry of Social
Transformation represents a culmination (to date) of that drive. This new Ministry
therefore speaks about an intention to "transform the Barbadian society to give
meaning to the right of every citizen to a decent quality of life not [to] offer
charity when what the poor members of our society need is a chance to improve their
economic and social wellbeing". (BLP Manifesto, 1999).

Democracy

The principle of democracy meaning participation in its widest sense is
obviously a fundamental principle of democratic socialism. As a precondition for the
realisation of the social revolution it is felt that full democratic participation must
exist in political, economic and social life. The case for such democratic participation
has been made on the grounds that it develops commitment and legitimacy among those who
participate and that social groups can help shape social and economic policy thus avoiding
some of the negative consequences of non-participation.

An examination of social policy formulation in Barbados during the
pre-independence period shows only modest attempts at participatory social planning in the
major social enquiries such as those conducted by Moyne (1945), Stockman (1962), and
Richardson (1954). While it is true that broader popular participation would have been
restricted by the limited knowledge, experience and organization of the masses of the
population in this period, it is also true that there was little real commitment at this
stage of social policy thinking to participatory planning.

The last two decades in particular have certainly witnessed a shift
towards a more participatory approach to social policy development with a deliberate
attempt to broaden the scope of social enquiry to relevant social groups and organizations
as well as to the general population. Public consultations, town hall meetings, the
invitation of written memoranda and public debate through the media have all become
regular features of the socio-political landscape of Barbados during this period. It is a
process which the Prime Minister himself has endorsed as a pivotal element in the effort
to build a mature democracy in Barbados:

Our democracy will never be meaningful if citizens are expected to cast
their votes and then withdraw from the process until the next five years because there is
no system to capture their ongoing participation in decisions that affect how they
live Barbados future rests on the fullest participatory democracy that we can
engender among all sectors of this society without this economic and social progress
will not be lasting. (BLP Manifesto, 1999).

As a central value in the ideology of democratic socialism,
humanitarianism is based on the assumption that each individual has potential and should
therefore be given the opportunity to develop this potential. From this perspective the
government is seen as having a major role in instituting social policy and ensuring the
realisation of the basic philosophical principles on which the ideology rests. The
development of social policy in post-independence Barbados has clearly been taking place
against the background of the ever-expanding role of the government in the delivery of
social programmes.

This is not to say that the role of the government in the
pre-independence period was in any way minimal. In fact the discussion on social policy
formation in the various sectors which follows clearly shows that Barbados entered
independence with a relatively well-developed social services infrastructure that was for
the most part publicly administered. The transition to a ministerial system of government
had taken place more than a decade earlier with no significant problems. Similarly, the
abolition of the vestry system followed by the final dismantling of local government in
1969,took place with no real dislocation in the range of personal social services
which were now being centrally administered for the first time in three centuries.

With respect to the delivery of social programmes in the areas of
education, health, housing, employment and personal social services there was already a
relatively strong institutional framework in place. The school plant was extensive,
already guaranteeing essentially universal access to education up to the secondary level
as well a substantial access to tertiary education up to university level. A new general
hospital had just been opened and a number of strategically located health clinics offered
primary health care within relatively easy access of the entire population. With respect
to housing, the Housing Board had been established more than a decade earlier and the
Barbados Development Board, the Board of Tourism and Technical Training Institute were
also put in place to manage industrial development and training in relation to employment
policy.

It was within this relatively sound institutional context that the
expanded role of the state in the delivery of social welfare policy, based on the
principles of democratic socialism, took place. In the international community, social
welfare policy had come increasingly to be seen as a citizenship right as well as
one of the imperatives of social, political and economic development and the impact on
Barbadian society was a consistent movement, particularly in the post-independence period
from residual to institutional conceptions of social welfare. The
institutional concept which sees social welfare as a necessary and ongoing function of a
complex society led increasingly to universalist principles of social service allocation
which in turn required adjustments in the institutional framework for programme delivery
to manage the process.

One of the obvious consequences of this approach in the
post-independence period was a programme of institutional strengthening and consolidation
of disparate but related agencies. These were further centralised for the more effective
delivery of social programmes. As Box3.1indicates, this
programme covered a number of the social policy areas under consideration here. The most
recent, and in many ways most significant, example of this has been the creation of the
Ministry of Social Transformation based on one of the principal recommendations of the Roett
& Joseph Report (1998) on the Rationalisation Study of the Personal Social
Services of Barbados. The stated objectives of this new Ministry of improved access,
increased efficiency and effectiveness of service delivery are consistent with the general
objectives of universalism which have informed the institutional developments of the
post-independence period.

It is a well-established fact within the field of social policy that
many social programmes fail to maximise their impact because of structural and
institutional deficiencies, particularly at the point of delivery. It is therefore
significant that the structural enhancement of the institutions for social programme
delivery in the post-independence period was complemented by a corresponding enhancement
of the human resource capacity of those institutions. Barbados consistent and
substantial investment in its human resource development through education and training
ensured that its public sector institutions were staffed with qualified and trained
personnel in both the administrative and technical streams.

Box 3.1

The consolidation of institutions for social programme delivery
(selective)

The management and delivery
of skills training programmes; apprenticeship programming

National Insurance
Department

1982*

The management and
administration of non-contributory as well as contributory old age pensions.

National Assistance Board

1982

The management and delivery
of services for the elderly.

National Employment Bureau

1983

The recruitment,
registration, counseling and placement of unemployed persons.

Youth Affairs Department

1995

The management and delivery
of services for young people.

Ministry of Social
Transformation

1998

The rationalisation of
social service agencies: National Assistance Board, Child Care Board, Community
Development Division, Bureau of Womens Affairs, National Disability Unit.

*The National Insurance Department itself was
established with the National Insurance and Social Security Act, 1966.

This in no small measure contributed to a certain degree of
effectiveness and efficiency in social service delivery in respect of the programmatic
ideals envisaged at the programme formulation stage of policy development.

The agencies involved in the delivery of social programmes were ensured
a pool of trained nurses, teachers, social workers, technicians, builders, researchers and
administrative personnel among others to service their requirements. In fact, the efficacy
of these training institutions is evident in the fact that successive waves of Barbadian
nurses, teachers, policemen and other service and technical personnel have been recruited
since the 1950s to service the human resource needs of the United Kingdom, United States,
Canada and the wider Caribbean.

Quite apart from the availability of qualified and trained
staff, it is also important in the context of social programme delivery that this training
took place within local institutions. Clearly within the field of social policy planning
and implementation, the socio-cultural context of policy formulation and delivery assume a
greater degree of significance than with physical planning for example. A genuine
understanding and appreciation of the social and cultural milieu of social programming is
often as important to the realisation of social policy objectives as technical knowledge.
It is therefore of considerable importance in the context of this issue that the social
policy agencies and institutions came increasingly in the post-independence period to be
staffed by qualified and locally trained personnel who brought with them the critical
social, cultural and technical requirements for advancing the delivery of social
programmes.

There is also an important political dimension to the process of policy
formulation and the nature of representative politics and political institutions in
Barbados has facilitated a high level of continuity in general policy orientation even
with changes in the governing party. Barbados has certainly not witnessed the degree of
political factionalism which, buttressed by racial affiliation and violence elsewhere in
the region, has at times derailed policy formulation or implementation. Apart from the
issue of generalized philosophical consistency across political parties, the major
political parties have also tended to transcend electoral politics in their functioning.
The role of Barbadian political parties in public education and generating a level of
consciousness outside of electioneering has been substantial and consistent through a
range of public discussions, meetings, and presentations in the print and electronic
media. The level of political awareness and sophistication of the average Barbadian
discussed elsewhere in this report is therefore a direct consequence of that role.

Since independence Barbados has maintained an impressive international
profile and presence that is in many ways disproportionate to its physical size. Whether
within CARICOM, the OAS or the United Nations, this profile and presence has resulted in
Barbados membership in, or serving on, a number of international Commissions and
other bodies relevant to the areas of social policy under consideration here. In addition,
Barbados is signatory to, and has ratified an expansive range of international conventions
which seek to improve and advance the human condition. This too has been an important
feature of the post-independence policy and institutional framework of Barbados.
Faithfulness to the articles and spirit of these conventions has meant that Barbados has
constantly been reminded of its obligation to improve and extend its standards in an
environment buttressed by technocratic, popular and political pressure.

This, then, has been the social, political and institutional context of
post-independence Barbadian society. A context in which philosophical ideals found a
naturally supporting institutional and ecological framework within which to effect the
process of policy formulation and implementation.

Since achieving independence in 1966, the health status of the
Barbadian people has markedly improved. The burden of infectious and parasitic diseases
and of many preventable communicable diseases has been greatly reduced through Government
health programmes and the universal right to basic health services has been established.
The epidemiological profile and health indicators of Barbados are consistent with those of
developed countries, and is not typical of a developing country. Health indicators in Table
1 illustrate the kind of levels of success in health commonly associated with
developed countries.

Table 3.1

Selected health indicators for Barbados, 1966 & 1998

Indicator

1966

1998

Life Expectancy

69.9

72.9(m)/77.4 (f)

Infant Mortality Rate (per 1,000 Births)

47.7

14.0

Child Death Rate (1-4) (per 1,000)

2.4

0.43*

Birth Rate

25.9

13.6

Crude Death Rate

8.2

9.3

N.B. *1996 data Source: Annual Report of the Chief Medical Officer

Historical perspective

Even in the early years of colonization in the West Indies, Barbados
had been recognized by the colonial powers as one of the most healthy of the West Indian
colonies, because of its natural advantages. The island was so well known as a health
resort, that it attracted the likes of George Washington (later to become the first
President of the United States) who had come to the island in 1751 to restore his
brothers health. At that time, unlike most of the other West Indian territories, the
island had little tropical bush, but well cultivated sugar cane fields and a geological
formation of mostly coral limestone deterred the settlement of water. To this day, the
islands flat terrain affords a universal accessibility which is not as evident in
many neighbouring islands.

The socio-cultural circumstances at the turn of the twentieth century
were quite outstanding for such a small country. The Barbados Telephone Service started in
1884, Bridgetown (the capital of the country) got its first public water supply in 1857,
and by 1910 underground cables to electricity were being laid on Broad Street. Barbados
also enjoyed a high standard of education in comparison with its Caribbean neighbours.
Free elementary education was granted in 1928.

The provision and adequacy of health services has always been very
critical to human development in Barbados. In the first half of the twentieth century,
poverty and pollution began to overcome the islands natural advantages, and, with
the exception of education, much of the infra-structural development did not reach the
rural areas. The country employed a number of public health measures to reduce its health
problems. A new spirit of voluntarism from among social crusaders gave rise to a number of
public health programmes and services which were later adopted by Government. By the late
1950's the establishment of a number of child health programmes, spearheaded by volunteer
health personnel had made an invaluable contribution to the reduction of the infant
mortality rate.

The health status of Barbadians depended to a large extent on
controlling the growth of the population. The Barbados Family Planning Association which
was started in 1953 has received world-wide recognition for its efforts in controlling
population growth and enabling Barbadians to enjoy a better quality of life.

The development of health centres in the 1950s had an indelible impact
on the health status of Barbadians. Their services included the control of communicable
diseases, maternal and child health, nutrition, dental health, ophthalmic and domiciliary
services, immunization, and the treatment of venereal disease and tuberculosis. The
protection of water supplies, sewerage and solid waste disposal and the protection of food
for sale were all integral components of the health centres services. The 1939 Moyne
Commission had identified better housing and sanitation as principal elements in a
preventive health care programme. Between 1949 and 1950, Government started housing
schemes in St. Michael, Christ Church and St. Lucy. In the 1950s the island was assisted
by the WHO through an Environmental Sanitation Project which oversaw the construction of
fly-proof pit latrines for Barbadians who could not afford the cost of installing proper
sewage disposal systems. Barbados victory over the burden of disease which
characterized the first half of the twentieth century was sealed when it successfully
integrated its public health services by abolishing the Vestry System of Government in
1958 and introducing the Cabinet System and ultimately internal self-government.

An era of development planning

Up to the time of its independence in 1966, Barbados progress in
health had been predicated on its own "natural advantages" and Governments
response to the social needs of its citizens. In retrospect, its success in health was not
only as a result of Governments avant-garde response to societal needs and
well-executed health care programmes, but rather was harnessed by an overall "design
of social and economic engineering in the context of the goals of the society". There
is a widely held view that Barbados out-distanced her Caribbean counterparts in health,
because it had a better literacy rate (which facilitated health education and promotion)
and was governed under more stable economic conditions.

The 1960s was dominated by the institution of a number of social
development programmes which are documented under sectoral heads, many of which had a
positive impact on the delivery of health services. In terms of health, the Queen
Elizabeth Hospital and St. Joseph Hospital were opened in 1964 and 1965, respectively;
district health services were re-organized and district hospitals established; training
facilities for nurses were expanded; and the Health Services Act was proclaimed in 1969
making provision for the control and regulation in a comprehensive range of health
matters. So that even at the dawn of independence, Barbados was very adequately fulfilling
its social and developmental obligations to its people in respect of health care.

In the early 1970s during the world energy crisis there were changes on
the capitalist economy worldwide and Barbados was faced with a decline in its sugar sector
(since the mid-1970s) and sluggish growth in domestic export. However, this decline in
sugar exports was an eye-opener. Government realised that the economy had been dominated
by a single economic activity and that ".... centuries of specialization in sugar
inhibited the entrepreneurial class from branching out into new lines of economic
activity, while labour lacked the skills and training required of a work force in a modern
economy". Consequently, in 1973 in its second development plan since achieving
independence in 1966, Government embarked on a development strategy for socio-economic
change which would be guided by institutional reform. The basic machinery for this reform
was to be characterized by improved systems, integration of services and unencumbered
decision-making processes.

The largest allocation of that Development Plan was to be spent on
social programmes with education and health consuming the largest portions. The relevance
to the current situation is that Government continues to maintain almost the same
expenditure on health. In the financial year 1998-99 funds allocated to health services
were a very substantial proportion of GDP at 10.9 per cent and was approximately 15 per
cent of the total Government expenditure.

What is clear throughout this period is that successive Barbadian
governments have always recognized and respected the relationship between human welfare
and development and this has led to the consistent and substantial allocation of resources
to sectors such as health. Even in periods of relative economic adversity such as the
global economic crisis of the early 1970s and into the structural adjustment period of the
1980s Barbados has always tried to protect its health sectors share of total
government allocations (Annex 1). Another important feature
of the period has been the fact that Barbados sought to strengthen the essential functions
of central authority in the health sector, which is one of the underpinnings of the reform
process, long before state reform had a globally recognizable face.

The health sector reform experience in Barbados

In the pre-emancipation era, health was viewed only in terms of the
physical well-being, that is the absence of disease. Today health is considered an
individual right and takes into consideration the social, physical, economic and spiritual
well-being of the individual, that is, it takes a holistic approach to health planning.

The principle of reform has always been founded on Governments
responsibility for the health and well-being of its citizens. From one century to another,
the prevailing economic, social and political factors of an era have determined the
approaches and initiatives used to fulfill that responsibility. Today, with the reduction
in financial and other resources in the face of the obligation to their citizens,
Caribbean countries seek out innovative solutions to effect the delivery of quality health
services.

Health sector reform has been institutionally defined as "... a
process directed at introducing substantial changes into the various functions of the
sector, with the purpose of increasing equity in the provision of health services,
efficacy in its management and efficiency in the satisfaction of the health needs of the
population". Barbados used these criteria twenty years ago when it undertook a system
assessment of the role, function and future initiatives of its health care system. A study
supported and financed by the Inter American Development Bank was executed by Peat,
Marwick, Mitchell Co. in 1977. One of the main recommendations of the study was the
development of a totally integrated and coordinated community-based health care system. It
is not surprising then, that it only took one year after the WHO Alma Ata Declaration
(1978) for Barbados to adopt the Primary Health Care (PHC) approach and establish the
polyclinic system. The broad policy goals of the Alma Ata Declaration included:

Equity in health care provision

Resources channelled to more effective use for preventive and promotive services

Community participation in health care

Inter sectoral linkages based on the effect of health on other sectors.

These policy goals had basically already been prescribed by the Peat,
Marwick Mitchell Study. Barbados used these basic criteria to shape its health sector
reform efforts after adopting the PHC approach.

From emancipation, through independence, to the 1990s, the reform
process continued to evolve in the Caribbean as governments responded to the needs of
their societies. Primary Health Care and the establishment of the polyclinic system in
1979 helped to give shape to policy formulation in Barbados. Through its network of
stations (8 polyclinics and 4 satellite stations) the polyclinic service became a
wide-reaching system that has provided care for those unable to access the private sector.
This decentralization of primary health care services through the polyclinic system,
together with the establishment of the National Drug Service a year later, effectively
revolutionized the health care delivery in Barbados to a point almost approaching the
National Health Service programmes of developed countries. The polyclinics provided the
full spectrum of primary care including preventive and public education programmes and
effectively meant that access ceased to be a major problem in health care delivery in the
island. There is little doubt, for example, that the heavy utilization of the ante-natal
and post-natal services at the polyclinics was a major factor in the improvement and
maintenance of maternal and perinatal health in Barbados.

The wider the consumer net, the more policy and legislation were girded
by attempts to strengthen programmes and make effective interventions. Some of the other
main features of policy initiatives and programme strengthening in the post independence
era are:

Four years after the first person was diagnosed with AIDS in 1984, a
National AIDS Programme was established to implement projects which would serve to reduce
the transmission of HIV and give support to persons infected with or affected by HIV.
Eight years later, a policy decision was made for the administration of AZT to HIV
positive pregnant women to resist the perinatal transmission of the disease; and an AIDS
Hostel was set up to give care and support in a home-based setting to the homeless
infected with HIV.

State response to changing environmental circumstances has engendered
the evolution of Barbados Vector Control Programme. With specific reference to
dengue fever which is fast becoming endemic to the region, the response of the Barbados
Health Service has covered intensive public education, targeting specific interest groups
and exacting more stringency in terms of prosecution of offenders found encouraging the
breeding of mosquitoes. An Action Plan for the management of dengue fever has been
formalized and an annual national debushing programme was also instituted.

Another response to environmental challenges has been the development
of an Integrated Solid Waste Management Programme. The programme is a "continuation
of strategies focusing on waste reduction and resource recovery and includes the proper
storage, handling, collection and disposal of solid waste in a manner that causes the
least possible negative economic, social and environmental impact on the community."
The logistics of this programme are still being formulated.

Secondary and tertiary care programmes have also been strengthened.
Between 1982 and 1996, the Queen Elizabeth Hospital benefited from several small studies
which sought to improve certain departmental operations in the laundry, kitchen and the
Accident and Emergency Department. The largest QEH study was commissioned in 1990 and
focused on institutional strengthening of the hospital. It was a comprehensive study which
proffered recommendations ranging from financial and supplies management to information
design and plant maintenance/engineering. It is important to note that many of these
studies and consultancies suffered from low levels of implementation.

The adoption of a more flexible domiciliary elderly health care
programme based on community rehabilitation as a means of cutting hospitalization costs.
This involves collaboration with operators of registered private Nursing Homes and other
homes for the elderly to provide these domiciliary services using a cost-sharing
mechanism.

The establishment of the Barbados Drug Service in 1980 which
essentially provided formulary drugs free of cost to persons aged 65 and over; children
under 16; and persons requiring drugs for the treatment of cancer, diabetes or
hypertension.

These developments are consistent with the approach social policy
development that has characterized the other sectors in Barbados where institutional
mechanisms have developed within the overall policy framework to respond to specific
challenges as they emerge. Critical to the success of this approach has been a consistent
overarching philosophy of social development which has facilitated the adjustment or
incorporation of new structural features of health care programming without compromising
the integrity of health care policy and programme delivery.

In respect of the Barbados Drug Service, PAHO/WHOnoted that the
public sector predominates in drug supply in only a few Caribbean countries and that
Barbados is notable in that its Drug Service "has been exceptionally efficient in
drug management, and its programme has been lauded for quality throughout the region"
[PAHO/WHO, 1996]. By controlling the importation and distribution of essential drugs the
Drug Service has reached the point where less than 10 per cent of Barbados health
budget is spent on drug procurement, keeping inventory and monitoring pharmacies. In fact,
for the period 1998/99 drugs and related items represented 7.9 per cent of current health
expenditure for fiscal year 1997/98 as compared with WHO and World Bank data which
indicate that developing countries spent 40 per cent of their health expenditure on
procuring drugs for the public sector [Barbados Economic and Social Report, 1998].

Since the Peat, Marwick, Mitchell Study, Government reassessed its
framework of policies and programmes, and found the need to rationalize its health care
system. In the last decade, three attempts were made at this substantial reform process
with limited success. The process underwent a metamorphosis and Government had sufficient
foresight to recognize that a systemic approach to assessing its entire health care system
would mean more than improving specific programme areas such as Geriatric and Mental
Health Services. The last Commission reflected this understanding and the study was then
supposed to respond to the anomalies in the health services and the rising cost of health
care. Specifically, it was to "promote improvement in health care quality, efficiency
in delivery and containment of cost, equity or fairness in access and public/private
collaboration". The rationalization was to take place within the framework of
policies and programmes and the activities were to be focused on areas of:

Chronic Care, Rehabilitation and Health Promotion

Primary, Secondary and Tertiary Care

Sector Analysis and Efficiency.

However, the consulting team did not address fundamental issues
relating to health financing, the management of information systems and the
Ministrys interface with emerging new and expensive technologies.

The way forward - Reform strategy

Even though Barbados has achieved great success in health, changing
needs and escalating costs require pervasive and innovative intervention. Barbadians are
living longer, suffering from an increasing incidence of chronic and degenerative diseases
and are consequently making increasing demands on the health-care system.

In the past, fundamental changes in the health system were not based on
a programmatic framework, but were delivered in the spirit of reform. However, to date
Barbados, like her Eastern Caribbean counterparts, still does not have a comprehensive
institutional framework by which to address health sector reform strategies.

The Barbados Ministry of Health has taken the initiative to plan a
reform strategy. This strategy has been based on demographic and epidemiological changes
currently dominating the health sector and the role of the state in health policy
direction.

There has been a marked increase in the incidence of chronic non-communicable diseases
from the age of 45 onwards, and they continue to be the main disorders affecting the
elderly whose population is increasing.

Morbidity from violence and injuries account for a significant proportion of hospital
admissions and there has been a steady demand of rehabilitative and physiotherapy services
that outstrips the ability of the public sector to satisfy.

The HIV/AIDS prevalence rate for Barbados is amongst the highest in the Caribbean. The
most recently available data from the Caribbean Epidemiological Centre (CAREC) show an
AIDS incidence rate (per 100,000) for Barbados in 1998 of 63.4, second only to the Bahamas
(86.8) and substantially above the rest of the Caribbean.

Barbados continues to devote a comparatively high proportion of its GDP towards health
and health services (now almost 11 per cent) and this proportion has risen markedly in the
last five years. In the next fifteen years, the demand for currently available medical and
health services is likely to increase faster than the ability of Government and the
economy to finance it.

The Ministrys reform initiative has therefore been designed in
response to address specific problems of:

The disease mix changing from acute and cheap to chronic and costly;

The demand for services growing faster than Governments allocated budget;

The planning and administrative needs of a large and complex health system outstripping
the capacity of Government as it is currently structured.

The Ministry has planned a three-phased approach to restructuring and
re-engineering the health system. Phase I will require the Ministry to make a number of
major policy and systems decisions to re-orient the health system and the Ministry of
Health. Phase II will focus on changes in the Ministrys organizational structure and
management processes. Phase III will focus on implementing appropriate changes to the
health systems structure and operations. Strategic planning, decentralization and
sectoral linkages are some of the underpinnings of this reform plan.

Although the implementation process is yet to get underway, Barbados is
well-positioned to make great strides in advancing its health reform strategy. In May
1999, since its inaugural meeting in the previous year, the Ministries of Health of the
OECS Member Countries (OECSMC) hosted a forum on health sector reform implementation
strategies.

The meeting discussed joint programme initiatives and agreed on the
major components of a collaborative programme that would guide the respective agencies in
pursuing the Health Reform Programme for the region for the next five years . Major
components of the framework include:

As a designated member of the working group established to carry the
process forward, Barbados will be able to effectively use its past experiences and its
current view of the way forward for reform strategies on health to help to shape and
determine consensus for health sector reform for the region.

Although the rights of persons with disabilities have been the subject
of discussion in the United Nations and other international forums for some considerable
time the evolution of specific policy initiatives in respect of this group has been much
more recent in Barbados. Even at this stage, the extent of disability in the general
population is not known although some progress has been made through the Barbados
Population and Housing Censusof 1990 which indicated that there were 10,323
persons with disabilities. This figure represents approximately 4 per cent of the
islands population, far below the World Health Organizations estimate that 10
per cent of any given population will have a disability. However, as has been acknowledged
internationally, differences in measurement criteria make comparative analysis in relation
to disability statistics very difficult. The local census did not, for example, include
persons with conditions associated with mental illness and it is felt that there is a much
larger community of persons with disabilities than has been identified so far.

According to the Report of the Task Force on National Disability Policy
(1997), the emphasis in the pre-1970s period was on the provision of basic education for
specific categories of children with disabilities. In 1974 the government established a
National Advisory Council to plan and coordinate programmes in voluntary welfare work and
for the rehabilitation of persons with disabilities. However the first significant policy
initiative only came in 1980 with the establishment of a National Committee for the
International Year of Disabled Persons. This Committee was set up to formulate a programme
for the observance of the year and to make recommendations for the development and
promotion of rehabilitation programmes such as care, training and employment to help
persons with disabilities reach their full potential.

Following the marking of 1981 as International Year of the Disabled,
the U.N General Assembly in 1982 adopted the World Programme of Action concerning
Disabled Persons in its Resolution 37/52and declared the period 1983 to
1992 as the U.N Decade of Disabled Persons. This resolution called on member States to
establish national committees or similar bodies in order to attain the objectives spelt
out in the World Programme of Action. In that same year, 1982, a National
Planning Workshop on the Needs of the Handicapped Childin Barbados was
sponsored by the National Childrens Home, the Pan-American Health Organization
(PAHO) and the Ministry of Health. One of the major outcomes of that workshop was a
recommendation for the establishment of a national coordinating body involving all the
ministries and private agencies providing services to persons with disabilities with
representation from the disabled community.

By the time Barbados entered the 1990s there was much broader
recognition of the disabled as an important vulnerable group for social programme
intervention. The party that eventually formed the government had promised in its 1994
manifesto that "rehabilitation of disabled persons will be a national effort designed
to facilitate the utilisation of their natural abilities and their participation in the
world of work." Consistent with that promise the government established a
Multi-Disciplinary Task Force on Disability in January 1996. This Task Force was mandated
to formulate a National Policy on Disability in accordance with the U.N Standard Rules
of Equalisation of Opportunities for Persons with Disabilities.

The main terms of reference of the Task Force were:

Formulate a national disability policy;

To recommend legislation to be reviewed and/or enacted and to
identify projects to implement the World Programme of Action

To examine implications of the ratification of Convention No. 159
and make recommendations for incorporation of its provisions into national legislation.

The Task Force submitted its report in February 1997 and in December of
that year a Unit for Persons with Disabilities was established. Among the first
responsibilities of the Unit was to prepare a Draft Policy on Persons with Disabilities
which has since been completed and was recently submitted to the newly created Ministry of
Social Transformation for consideration.

The major concerns and problems identified by the Task Force were
entirely consistent with those which had been expressed at the National Planning Workshop
held a decade and a half earlier. The report of the Task Force suggested that not much had
changed in respect of the social condition of the disabled, namely:

Inadequate assessment and rehabilitation facilities for persons with disabilities;

Perceived discriminatory practices and deficiencies in the educational, vocational,
rehabilitation and employment subsectors of the society;

Gross lack of accessibility to public buildings, public transport systems, the built
environment  viz curbs, pavements, ramps;

The inability of persons with disabilities: to access information through the media and
other systems, on housing, and sporting and recreational facilities;

The inadequate and disparate levels of income support made available to persons with
disabilities through social security and social welfare provisions;

The paucity of information on persons with disabilities and the general lack of societal
awareness of and sensitivity to the situation of such persons; and

The virtual ignoring of the concepts of integration, normalisation, mainstreaming and
independent living in the policies and programmes that affect persons with disabilities.

The Report of the Task Force also made it clear that in order to ensure
that the legitimate needs of persons with disabilities are addressed, a national policy
must be concerned inter alia with:

The continuing socio-economic marginalisation of persons with disabilities

The absence of a national plan of action managing the disability situation

The lack of adequate education, training and employment opportunities

The absence of a Disability Act that enshrines the rights of persons with disabilities

The lack of public sensitivity, data and research on disability and rehabilitation
issues

The Draft Policy prepared by the Task Force has identified as its
policy objectives the creation of supportive environments favourable to integration and
participation; equality of opportunity toward the maximisation of potential and the
elimination of marginalisation and discrimination; empowering persons with disabilities to
participate in socio-economic development; the provision of a framework for social
planning; and to facilitate ongoing research on disabilities.

The general principles underpinning the specific policy recommendations
span the broad range of issues considered to impact the socio-economic condition of
persons with disabilities and include:

The creation of an appropriate legislative base to enhance life and remove
discrimination;

Facilitation of governmental and non-governmental cooperation in decision-making in
respect of persons with disabilities;

Public education on disabilities with a view to increasing knowledge and reducing
prejudice;

Creation of a National Register for all persons with disabilities;

Provision of a colour-coded National Registration Card to easily identify persons with
disabilities;

Right of access to community-based health care, preventative and rehabilitative services
in respect of persons with disabilities;

A building code, enforced by the proposed Building Authority to ensure accessibility to
the physical and built environment;

The right to dignity, to speak and advocate, and to make choices;

Access to adequate social security benefits;

Rights of accessibility to appropriate transportation;

The adaptation of "best practices" in all areas of disability and extensive
international networking to the advantage of persons with disabilities;

Access to education at all educational levels, in an integrated setting wherever
possible, and specialised facilities for minorities for whom specialisation would be more
beneficial;

Equalisation of employment opportunities;

The involvement of persons with disabilities in the full range of social, recreational
and cultural activities;

Research and monitoring in all areas related to persons with disabilities.

Existing programmes and services

The lengthy listing of programming requirements for the disabled in the
Report of the TaskForce on National Disability Policy is indicative
of the fact that historically, little attention has been paid to the disabled in terms of
consistent programme development. In fact most of the existing programmes cater to the
special educational needs of children with disabilities.

In terms of public sector agencies, there are four annexes to
mainstream primary schools offering special education for mentally challenged children up
to age eleven. The Centre for Pre-Vocational Training, which draws most of its students
from the primary school annexes, offers a primarily functional curriculum preparing
children for life and work to the extent of their capacity. In addition, the Alma Parris
Secondary School offers an alternative curriculum to students who, while they may be
learning-impaired, are able to function at the level of a secondary institution. The
School for the Deaf and Blind, as the name implies, offers special education to hearing
and vision-impaired children. There is also a number of government-assisted private sector
agencies offering services to children and young people with disabilities including the
Childrens Development Centre, the Challenor School, the Learning Centre and the
Thelma Vaughan Memorial Home [see Box 3.2].

Roett and Joseph (1998) found that 2 877 or 32 per cent of the 8 903
persons on the Welfare Roll up to the end of 1996 were disabled persons. Their report on
the rationalisation of the social services makes a case for the equalisation of the
disability grants for the adult welfare client over 18 years with that paid to
"blind/deaf-mute" clients under the National Insurance and Social Security
Scheme. The former receives $33.00 per week as against the $67.00 per week received by the
latter [see Table 3.2].

A governments programmes and policies are generally articulated
in its development plans. An analysis of these development plans over the
post-independence period indicates that there has been no consistent attention to the
issues related to youth as a social group. Rather, planning and policy development over
this period has been characterised by the type of incrementalism that has tended to be a
feature of much of social policy development in respect of vulnerable groups in Barbados.

The early 1990s marked the beginning of a more intensive programme of
research and consultation with young people towards social policy formulation as popular
concern mounted about their social circumstances and behaviour. The government set up the
National Commission on Youth in 1991 against the background of an increase in social
problems in the latter half of the 1980s involving youth and the subsequent intense public
debate concerning this phenomenon. The specific objectives of the Commission were:

To provide a socio-demographic profile of youth in Barbados noting trends in the same

To identify and outline the major needs of these youth, and the major social problems
which they face

To investigate the major personal, social, cultural and institutional factors which
create the identified difficulties

To identify and analyse laws, policies and programmes related to youth with a view to
discovering the ways if any in which they adversely affected youth

To recommend appropriate policy initiatives.

Two new policy initiatives for youth which emerged were the Barbados
Youth Service (BYS) and the Youth in Business Project. The BYS was established in October
1991 as a one-year programme for out-of-school youth with the objective of providing a
disciplined, structured environment in which to facilitate their development. The BYS had
an intake capacity of 100 young persons aged 16 to 22 years who would follow a phased
programme of personal development, skills development and orientation to the world of
work.

The Youth in Business Project was launched in 1992 under the Youth
& Community Development Department with the primary aim of generating non-traditional
self-employment among youth, particularly in the areas of small business. Two Youth in
Business Centres were opened offering support to prospective young business persons. In
general, however, the scope of this initiative was much too narrow in the context of
existing demand and the numbers who benefited from this Youth in Business programme were
not sufficient to make a serious impact on the existing levels of unemployment.

Following the change of government in September 1994, the newly
established Ministry of Education, Youth Affairs & Culture convened a National
Consultation on Youth, the main purpose of which was " to provide an open forum
for the discussion by those persons and organizations involved with youth at various
levels, as the basis for the formulation of the National Policy on Youth". This was
followed almost immediately by a Regional Seminar on Youth Employment and Youth
Enterprise. According to theWhite Paper on YouthDevelopment in
Barbados (1995) prepared by the Ministry of Education, Youth Affairs &
Culture:

These two encounters provided the Ministry with valuable additional
information and guidelines to facilitate the work which needed to be undertaken as a
matter of urgency.

There apparently was some urgency felt by the government because within
a few months, in April 1995, the Youth Affairs Department was established as a
"coordinating, facilitating and collaborating agency in respect of matters concerning
youth". The responsibility of the Youth Affairs department was to fulfil the
governments mandate as it relates to youth development and it was set up to operate
through three programming channels:

The Barbados Youth Service (BYS)

The Youth Development Programme (YDP)

The Youth Entrepreneurship Scheme (YES)

The work of the department is primarily facilitative and it works with
governmental, non-governmental organizations, international agencies, the private sector
and individuals to create and sustain the positive environment needed, in the words of its
operating theme, for "building tomorrow today".

The principal objectives of the Youth Affairs Department are:

To harness and channel the energies of youth into the process of nation-building;

To provide young people with the opportunity of finding alternative means of employment
instead of relying on traditional ones;

To build harmonious relations between Barbadian citizens and develop a more caring
society in the process;

To create and environment which will promote confidence in the culture, thus equipping
the youth to deal more effectively with negative influences;

To redirect the lives of young people who manifest negative attitudes and dysfunctional
social, emotional and behavioural trends.

The Barbados Youth Service was established in 1991 as a one-year
structured programme providing personal development skills, disciplinary training and
attitude building to young people between the ages of 16 and 22 years. Under the Division
of Youth Affairs there has been an increase in the intake of young persons into the
programme (from 100 to 250 annually) and an expansion of the programme to include a range
of technical and vocational skills training as well as an academic training programme. The
Barbados Youth Service also provides a job attachment programme as a final element in the
one-year training exercise.

The Youth Entrepreneurship Scheme (YES) was set up in August 1995 as a
new initiative replacing and broadening the scope of the Youth in Business Programme which
had been established by the previous government in 1992. YES targets young people between
the ages of 16 and 30 years offering a network of resources to support emerging
entrepreneurs with services including:

Direct technical assistance

Mentorship

Entrepreneurial development training

An accounting service

A marketing service

Facilitation of access to financial assistance

Thispackage of services involves an interesting partnership
between public and private sectors, the latter being involved as mentors and technical
partners in the delivery of the programme. According to the Ministry of Education, Youth
Affairs & Culture, YES is aimed directly at tackling the issue of youth unemployment
through the provision of self-employment opportunities towards the provision of a strong
entrepreneurial and business ethic among young school leavers and unemployed youth.

The Youth Development Programme (YDP) represents a personalised
approach to the delivery of youth programmes at the community level. Under this programme
the island is divided into four zones and then into thirty-two districts each serviced by
a Youth Commissioner (Field Officer). Apart from forming the research arm of the Division,
the YDP is responsible for mobilising young people towards positive youth development,
programme planning and delivery and facilitating the access of young people to the wide
range of social services available to them. An important feature of the work of the YDP is
a massive-community based training programme in sports and in a range of cultural
disciplines.

These programmes under the Division of Youth Affairs together with a
range of other new initiatives, particularly in the area of services for young
entrepreneurs have emerged within the last five years. While the majority of these
programmes have not been operational long enough for any meaningful assessment of their
impact to be made, the indicators are positive. Hundreds of young persons have benefited
from the entrepreneurial development services available and youth unemployment rates have
been falling faster than national rates. The real test, however, is in the sustainability
of these initiatives and of the enterprises which they have generated. In addition, there
remains some degree of disarticulation and overlap in respect of services for young
entrepreneurs and the rationalization of these services would contribute to an overall
increase of efficiency of governments efforts in this regard.

A number of new policy initiatives have been outlined in the Barbados
Labour Party Manifesto 1999 in order to " diversify its programmes into areas of
clearly defined need." Among these is a shift downwards of the age-range of young
persons targeted for programming beginning at eight instead of fifteen years of age. The
rationale advanced for the change is that the building of trust is so critical to the
success of youth development that programming should seek to start at a stage where the
building of trust is easiest. The government also proposes to introduce a National Service
Programme whose objectives will be to involve young people in the performance of community
service and to expand programmes for conflict resolution at the level of groups and
community. Another interesting initiative is the proposal to assist in the establishment
of a Youth Village offering respite care to young people whose domestic environment proves
inimical to their personal development and offering temporary accommodation to facilitate
the transition of young people from custodial or residential care to independent living
arrangements.

Practice and achievements

Two underlying philosophical principles have guided the operations and
programme formulation of the Youth Affairs Department  these are participatory and
research-driven. In a paper outlining this approach the Director of Youth Affairs argued:

Social planners are . in general terms, somewhat removed from the
social reality of young people - perhaps moreso than any other social group. It then
follows that to plan social programmes for youth without their participative involvement
is to encourage low take-up, indifference or even alienation among that prospective client
group. It is the recognition of these facts that has informed the participatory approach
to the design and delivery of social programming in the Division of Youth Affairs."
(Carter, 1997).

Against this background, one of the first orders of business of the new
Youth Affairs Department after its establishment in 1995 was the design and implementation
of a National Youth Survey whose objective was to collect base-line data on the
educational, training and occupational status and aspirations of young people as well as
to determine the extent of their involvement in structured/organised activities and
specific needs. The survey was carried out by the field officers of the Department and
eventually saw more than 40 000 young people in the target group 15  30 being
interviewed. This provided a rich data-base on which subsequent programming of the
Department was based in a direct and focused way unlike anything that had happened before.

The process of consultation with young people also included annual
Consultation Workshops in which officers of the Youth Affairs Department met with
representatives of youth and community organizations to determine their needs and
appropriate response methodologies. Another innovative strategy is the Annual School
Leavers Tracer Survey which targets the approximately 4 000 young people leaving
school each year and collects specific data on their educational, training and employment
aspirations as a basis on which the field officers respond through direct contact in order
to facilitate the realisation of these aspirations. The Department has engaged in a wide
range of research and consultative activity towards responding to the needs of young
people.(Box 3.3).

As a consequence of the intensive consultative fieldwork carried out by
the Department, thousands of referrals of young people have been made to various social
service agencies on the basis of needs identified in the field. The data base generated
has also positioned the Department to make referrals for employment or sports scholarships
on behalf of young people on the basis of criteria presented by prospective employers and
recruiting agents from universities as well as "internal referrals to its own
programmes to facilitate needs identified by young people. Similarly, in response to the
expressed need of youth and community groups as expressed at Consultation Workshops, the
Department has established a Secretariat to service the needs of such groups and produced
Directories of Youth and Community Groups, Social Services and Higher Education and
Training so that young people may pursue their self-development independent of the
Department.

This approach to youth programme formulation and the innovative
initiatives of the Youth Affairs Department have won the acclaim of regional agencies such
as the Commonwealth Youth Programme and CARICOM, both of which have sought to model the
Barbados programme elsewhere in the region.

The education system in Barbados provides a wide and varied range of
educational opportunities from the pre-primary to the university level. Public education
is free at the point of delivery and compulsory for children up to age sixteen, thus
providing for effectively universal participation at the primary and secondary levels. In
addition, a number of programmes are provided to ensure active participation by all
students. These programmes include the provision of school meals at the primary level; a
textbook loan scheme; transport assistance; a uniform grant and bursaries at the secondary
level; and a wide range of awards, grants exhibitions and scholarships at the tertiary
level.

One of the principal factors in Barbados enviable ranking on the
Human Development Index relates to its educational policies, practices and strategies.
Barbadian governments have long emphasised that education is a necessary condition for
self-sufficiency and individual dignity. It has long been proven that education has
immense power to transform  as a key vehicle to increase national and individual
incomes and bring about economic growth.

For centuries Barbadian education has been identified as a major source
for social change and modernisation of attitudes, values, economic behaviour. Evidence of
the success of the Barbadian education system can be seen in the demand for educated
Barbadians to work abroad in every sphere of the world of work, and Barbados has
maintained a thriving export of its human resource. What is significant about this fact is
that a small island such as Barbados, with a relatively small population has not suffered
a "brain drain effect" that accompanies large population outflows as in many
other countries. The high standard of education has ensured that even with population
outflows, Barbados is still replete with well-educated individuals who can adequately
service the countrys needs.

Underpinning the support systems is the premise that every Barbadian
has the right to educational opportunities to allow for the fullest realisation of
potential thus resulting in a meaningful contribution to the total development of the
country. Presently, education in Barbados is compulsory by law between ages 5 to 16.
Indeed, Barbados boasts one of the only systems in the world where education is free up to
and including the tertiary level for all its nationals.

Early colonial education

Formal education was introduced in Barbados in 1686 when two St. George
planters, John Elliot and Rowland Bulkley donated land and 1,000 pounds sterling for the
start of a charity school. This first of many charity schools was established for the
education of poor white children.

These efforts made no provision for the education of the slaves and
their children who had been transported from various parts of Africa and who spoke
different languages. It was considered dangerous to teach slaves a common language as this
could lead to the successful planning of revolts. Subsequently the first school for
coloured boys was built in Bridgetown in 1818. By this time the imminent emancipation of
slaves begin to stir public interest in elementary education. As a result, in 1827 an
elementary school for coloured girls was founded in Bridgetown as well a Girls
Central School and Boys Central School.

The post-emancipation period

A meaningful step was made towards education when the Act for the
abolition of slavery was approved by the legislature in 1834. Estate schools were set up
to provide education for 3,057 pupils. Other elementary schools supervised by the clergy
catered to the needs of another 4,372. In addition to the above, there were Saturday,
Sunday and evening schools organized with assistance from the clergy. By 1842, there were
approximately 200 schools in early Barbados.

In 1850, the first Education Act was passed and among its most
important provisions were the establishment of an Educational Committee and a part-time
School Inspector. In 1858, a second Education Act was passed. Under this Act the School
Inspector became a full-time officer and the content of the school curriculum was formally
determined. In addition, the pupil-teacher system was introduced and an incentive
programme of "payment by results" was initiated. Education in Barbados developed
rapidly during this period and government grants were increased annually to 9,200 pounds
sterling by 1874.

The emphasis in the immediate post-emancipation years was to provide
children with the elements of education which were basically the three
Rs. Since this period the Barbadian education system has evolved into
the comprehensive programme which now exists, providing a wide and varied range of
educational opportunities from the pre-primary to university level.

Early childhood education

Early childhood is defined as the formative stage of development
spanning the period from birth through to seven years. This period is recognised as the
time when young children need security, safety, good nutrition and exposure to concrete
and varied learning experiences. The objectives of early childhood education is to help
children build good habits for effective living; enjoy learning through play; learn
spiritual and moral values; and develop thinking skills, imagination and self-reliance.

The Government of Barbados has for many years provided Early Childhood
Education for young children. Prior to the 1940s infant education in Barbados was
similar to that of older children where the emphasis was on learning to write well,
memorize passages, repeat tables and sing hymns. The infant schools were mainly for the
education of girls who were allowed to remain at school until the age of fourteen or
fifteen. However, following the 1944 Hadow Report in England, administrators of
Barbados education system instituted changes that emphasised the difference between
infant and primary education, making provision for schools to be divided into Infant and
Junior departments.

This innovation ensured that children were promoted by age rather than
ability, allowing Early Childhood Education to be defined by age. This action caused
spiraling effects in the development of Early Childhood Education: the first Infant
Methods Inspector was appointed, training courses were organised in Infant methods and
Infant syllabuses were revised. The impact on teaching was that infant classes became less
rigid, encouraging a free and more relaxed learning environment. Unlike previous
situations the curriculum was becoming more activity oriented and teachers began to use
home made materials and equipment to enhance early childhood instruction.

More recently, some primary schools have been admitting children from
as early as three or four years old. Over time nearly all primary schools have catered to
this age group in a Reception Class; that is, the class for under fives. The establishment
of Erdiston Teachers College led to a cadre of teachers who were professionally
trained in Early Childhood Education, recognising the stages of growth and development of
the child and acknowledging that children mature at varying levels and that instruction
should reflect this.

Outside of the public school, private nurseries had long been making a
contribution to early childhood education. Those who could afford such private education
sent their children to private/nursery education. This situation then led to the
Government of Barbados establishing its first nursery school in 1965 - Erdiston Nursery.
This was followed by Government Hill Nursery in 1972, Eden Lodge Nursery in 1975 and the
St. Stephens Nursery in 1993.

Further expansion in early childhood education came when, after 1975
Government pursued a policy of encouraging schools which had space to establish nursery
departments, providing greater space for under fives. In 1964 and onward, the Government
of Barbados established day care facilities within all major housing estates across the
island starting with the Pine Housing Area. Such facilities were eventually taken over by
the Child Care Board which sought to ensure that a sound education component was a part of
the Day Care programme. Today, each day care facility has a learning centre with trained
child care officers. The programme follows an early childhood syllabus with a daily
schedule of instructions.

Since 1989, the early childhood movement in Barbados has been
strengthened by the emergence of an Early Childhood Education Association. This group is
mainly comprised of dedicated early childhood educators in the public schools whose
mission is to:

Educate the public as to the importance of early childhood education to the benefit of
every Barbadian child.

Provide teachers with opportunities to obtain and exchange information and keep abreast
of current trends and innovations in early childhood education.

Assist teachers in solving problems which are associated with the administering of early
childhood programmes.

Early Childhood Education is an integral part of the delivery of
quality education in Barbados. It is generally accepted that access to early childhood
education programmes enhances the further success of the child in coping with learning
experiences. Empirical data produced by Dr. Anthony Layne, in a Public Lecture on Gender
and Academic Performance in Barbados (April 29, 1997) identified the exposure of girls to
early childhood education as a factor that led to their more superior academic performance
over boys.

As of 1995, there were 8115, three- and four-year olds in Barbados of
whom 4239 are catered for in the public school system. The Government of Barbados
continues to emphasise the importance of Early Childhood Education and is continually
expanding its resources to carry out reform proposals in this area. To this end the
Ministry of Education:

Has formed an alliance between schools and the PTAs to provide volunteers who act as
Teacher Aides in nursery schools

Is providing greater training opportunities in Early Childhood Education for teachers of
children ages 3-8.

Is providing technical assistance for the private institutions offering Early Childhood
Education Programmes.

Is ensuring that there are more resources available to these programmes to ensure more
effective teaching.

Primary education

The term primary is used to describe education provided for children
between the ages 5  11. It also encompasses students 11- 16 who follow a special
curriculum at one composite and one Senior School. At present there are eighty-one public
schools as well as 19 nursery and 20 private primary schools registered with the Ministry
of Education. Subjects taught at the primary level include: English Language, English
Literature, Religious and Moral Education, Science, Mathematics, Art, Handicraft,
Agriculture, History, Music, Geography, Social Studies, Health, Physical Education.

Government supports the position that primary education forms the
bedrock of the education system and has demonstrated its commitment to primary education
by consistently increasing the level of funding after the cuts which occurred during the
period of stabilisation and structural adjustment. There is also a deliberate policy of
ensuring that the teachers at this level are trained either at the Erdiston Teachers
Training College or at the Faculty of Education at the University of the West Indies [see
Table 3.3].

One significant display of such commitment is the allocation of Bds
$350m to a seven year Government of Barbados, IDB/CDB Education Sector Enhancement
Programme (EduTech 2000). This programme will eventually affect all schools and includes
the rehabilitation and repair of existing school plant, teacher training and technical
assistance, institutional strengthening, and procurement and installment of educational
technology in all public schools and selected private schools.

Education Sector Enhancement Programme (EDUTECH 2000)

This programme encompasses the vision of the Government of Barbados to
carry Barbados forward and to place it on the cutting edge of innovation through the
development of its most precious resource, namely, its people. Its objective is to ensure
that Barbados educational system becomes more responsive to the needs of the
community, the needs of industry and the needs for Barbados development in the
future. Edutech 2000 seeks to ensure that Barbados remains competitive in the emerging
global environment while ensuring a better life for its people. The programme seeks
primarily to increase the number of students contributing to the sustainable social and
economic development of Barbados. EduTech 2000 will therefore:

Shift the pedagogical approval of the teacher system from teacher-centred to
child-centred.

Promote project-based and collaborative learning among students at primary and secondary
schools.

Incorporate the use of technology with the teaching process

Revise and reform the existing curricula to take into account the demands of the
twenty-first century.

Encourage students to become responsible for themselves, their communities, their
families and their country.

The Government of Barbados has also formulated a number of initiatives
which will serve and are serving to assist with the delivery of "Quality Education
For All" as the theme of the White Paper on Education Reform (1995) states.
Significant advancements since 1994 include:

Re-introduction of the Preliminary In-Service Teachers Training Programme at
Erdiston Teachers College in 1997.

Establishment of a Parent Education Programme to train over 1,100 parents of children
who are under-performing.

Restructuring of the Certificate in Education Management and Administration at Erdiston
Teachers Training College.

Amendment of the Education Act to create a system of flexible transfer to allow children
of primary age to write the Secondary Schools Entrance Examination when they are
academically ready as long as they are between the ages of 8 and 12. This allows gifted
children an opportunity to move at an accelerated pace and those who have not mastered the
requisite skills may benefit from a deferment system.

Introduction of a system of Partial Zoning in 1996 for the transfer from Primary to
Secondary level to allow for greater equity in the distribution system.

Establishment of a Diagnostic and Remedial Unit in the Ministry of Education, 1994
 1997, to be able to better diagnose and remedy learning difficulties experienced by
some children.

Tests for over 28,000 primary school children for hearing, speech and sight impairment
and the provision of necessary follow-up treatment.

Introduction of Criterion- Referenced Tests to properly assess each childs skills
at ages 7 and 9 years.

Provision of a subvention to Parent Teachers Association to support the training
of Parent Volunteers.

Recruitment of 34 clerk/typists to provide clerical assistance to principals in the
primary sector.

Appointment of community-based committees to service primary schools.

Construction of new primary schools and expanded maintenance programmes for all schools.

The amalgamation of 64 schools to form 31 up to 1995, with the construction of 20
schools to accommodate this change.

Reduction in the cost of books for parents of primary school children.

Introduction of a pilot programme in African Heritage Studies, Citizenry, Family Life
and Health Education in some primary schools.

Secondary education

Secondary education is provided in 23 public secondary and 10 assisted
private schools. Admission to secondary school is on the basis of the Barbados Secondary
Schools Entrance Examination. The curriculum includes: Agriculture, Art, Handicraft,
English Language, English Literature, Religious and Moral Education, Foreign Languages,
History, Music, Geography, Social Studies, Mathematics, Sciences, Health, Physical
Education, Technical and Vocational Education. This curriculum has recently been revised
to include African Heritage Studies, Citizenry and Family Life and Health Education.

Students write the examinations of the Caribbean Examinations Council
(CXC) at the Basic and/or General Proficiency levels between the ages of 15 and 17.
Students whose level of performance is creditable may write a Cambridge Advanced Level
Examination between 17 and 19 years old.

The major function of secondary schools is to ensure that all students
acquire knowledge, skills and attitudes which lay the basic foundation for future careers
and good citizenry. In addition, this secondary sector has seen the introduction of some
major policy initiatives. These include:

The Edna Nicholls Centre which offers counseling and correction services to suspended
students through an out-of-school suspension programme.

The establishment of the Alma Parris Memorial School as a Secondary School with an
alternative curriculum for children with learning difficulties.

The introduction of a School Meals programme in certain Secondary school where there is
a clear economic need.

In order to make young citizens aware of their cultural heritage, a comprehensive
cultural programme was introduced in 1998 across the school system to teach activities
such as Stilt Walking and the history of the Barbados Landship.

Intensive rehabilitative work was done and is continuing on Secondary Schools.

Provided for the procurement and installation of educational technology in secondary
schools.

Since 1990, an OASSponsored Basic Education Project has exposed public secondary
school teachers to basic training in Remedial Education, particularly in the areas of
Language Arts and Mathematics, resulting in at least nine well equipped Basic Education
Clinics at Secondary Schools across the island.

To accomplish further improvement at the Secondary level, the Textbook Loan Scheme was
operationalised in all public secondary and assisted private schools. This model has been
adopted by other CARICOM countries as part of the Government Technical Cooperation among
Developed Countries (TCDC) Programme.

A scheme for the provision of uniforms for secondary school students was introduced in
1980. This scheme provides a once-and-for-all grant of $100 to each qualified student
entering a secondary institution for the first time.

The review of students performance at this level is continually being examined.
Teachers use appropriate analyses of tests in an effort to identify, strengths, weaknesses
or gaps in the students knowledge, to diagnose the high points of the programmes
and, thus to focus their instruction accordingly.

The Government of Barbados is also committed to the establishment of a National
Certificate of Secondary Education which would provide evidence that the holder of this
certificate has satisfactorily completed an approved programme of Secondary Education and
has attained an acceptable level of competency in a set of subjects. This is being
undertaken in conjunction with the existing Caribbean Examination Councils and the
Barbados Secondary School Certificates.

Establishment of a programme in conjunction with UNESCO, catering to students of
secondary schools who excel in science, cricket and performing arts.

In the 1980s most of the public secondary schools were changed to
co-educational institutions. Today there are only two single-sex secondary schools
remaining in Barbados. This policy had the immediate effect of increasing the number of
places for girls at secondary school because at that time there were more male secondary
schools than there were female schools.

The private secondary schools in Barbados have served Barbados well
over the years especially during the 1960s when there were insufficient school places
available. At present there are 10 Assisted Private Schools accommodating some 2000
students. Government support given to these Assisted Secondary Schools includes the
provision of a trained teacher in remedial education; support of computer studies
programmes at the rate of $4,000 per school; and specialist assistance with the
implementation of the Information Technology and Remedial Education programmes.

Tertiary education

Tertiary or post-secondary education plays a critical role in the
development of Barbados human resources and for this reason a sizeable proportion of
the resources is allocated to this sector. Education at the tertiary level is provided at
vocational and technical colleges as well as university. These institutions include: The
Barbados Youth Service, The Samuel Jackman Prescod Polytechnic, The Barbados Vocational
Training Board, Erdiston Teachers College, The Barbados Community College and The
University of the West Indies.

Governments commitment to encouraging and promoting the growth
and development of higher education is quite evident as it provides substantial funds for
the provision of scholarships and exhibitions to those students whose performance at the
end of the sixth form programme is outstanding. To further assist with the cost of
providing scholarships, grants and awards for the pursuit of tertiary education, the
Student Revolving Loan Scheme was established in 1977 with the assistance of funding from
the Inter-American Development Bank. The Scheme makes repayable credit available for the
finance of studies in specific professional and technical careers identified as being of
primary importance to the economic and social development of the country. For the first
three-quarters of fiscal year 1999/2000 the Scheme had disbursed $6.5 million and had seen
more than 200 loans approved.

The changing requirements of the workplace demand a highly skilled and
well-equipped work force to successfully ride the crest of the emerging economic and
technological wave. To this end the Ministry of Education is continually seeking to:
ensure increased access to education for all its citizens; facilitate the provision of
on-going Adult and Continuing Education Programmes, and providing for the articulation of
programmes and courses both horizontally and vertically. This facilitates student mobility
at all ages and stages, and a career path in each occupational sector.

Major initiatives recently undertaken were:

Construction of Library Resource Centres at The Samuel Jackman Prescod Polytechnic, The
Barbados Community College, Erdiston Teachers College and Barbados Hospitality
Institute.

Expansion of The Samuel Jackman Prescod Polytechnic from 1,400 students to accommodate
2,500 students and further retooling of the plant and equipment.

The opening of a new AutoTronics lab at the Polytechnic to provide comprehensive
training in the most recent automotive technology.

Construction of the Hotel Pom Marine, the new location for the Hospitality Institute of
the Barbados Community College, accommodating over seven hundred students in 1998.

Expansion of the enrolment at the University of the West Indies from 2,811 students in
1995 to 3,568 students in 1999.

Adult and continuing education

The changing requirements of the world of work and the need for the
population to be readily retrainable at any stage make it essential for citizens to
recognise and accept learning as a continuous lifelong process. To this end, the
Government of Barbados remains committed to the Continuing Adult Education Programme.

The main emphasis of these programmes is on problem solving  a
pre-requisite skill for dealing with problems and situations which adults encounter daily.
In addition, literacy and numeracy skills are taught and reinforced using areas of
functional knowledge for living. Projections for the future of continuing and adult
education include:

Increasing the number of continuing and Adult Education Centres across the island

Expanding its delivery of functional literacy and numeracy programmes at the community
level.

Expanding target groups to include retirees, adults with special needs and
parents/guardians.

Further collaboration with quasi-formal institutions concerned with continuing education
of adults for example, Barbados Institute for Management and Productivity  BIMAP.

Technical and vocational education

Technical and Vocational Education and Training (TVET) refers to those
subjects, training programmes and activities which involve technical skills, for example
Electronics, Home Economics and Office Practice. Although some form of technical and
vocational education is delivered over the three levels of education; primary, secondary
and tertiary, most of this training towards occupational competence takes place at the
tertiary and post secondary institutions. According to Technical and Vocational
Education in Barbados, 1996:

Vocational education is designed to prepare skilled personnel for
industry, agriculture, commerce among others, while Technical Education is designed to
prepare middle level personnel, for example technicians for industry, agriculture,
commerce, medicine, among others.

The responsibility for the Technical and Vocational Education Programme
is shared by the Ministries of Education and Labour. This shared responsibility impacts on
policy development and planning as well as on delivery and coordination of the programme.
The Ministry of Education has in its mandate both technical education and training, while
the mandate of the Ministry of Labour focuses on vocational training and has been
identified more closely with the labour market. In addition, its programmes are geared
towards the needs of employers demanding trained manpower or skill-training needs of
unemployed persons.

The two major TVET learning institutions are the Samuel Jackman Prescod
Polytechnic and The Barbados Community College with assistance from BIMAP. The Ministry of
Labour implements its mandate through the Barbados Vocational Training Board
(apprenticeship and skills training programmes) and the TVET Council.

The TVET Council has the responsibility for advising on national
policy, developing national plans and establishing standards for TVET and ensuring the
coordination of an articulated system of programmes, tests and qualifications. It also
provides for an Employment and Training Fund which is for the promotion and support of
training and the upgrading of skills for the Labour Force. Employers and trade unions are
well represented on the TVET Council and help to adjust Technical and Vocational Education
in accordance with the needs of the labour market. In addition to these Government TVET
institutions, a number of private institutions as well as community and church 
based groups are actively engaged with mostly pre-employment training which is mainly
publicly financed.

The Government of Barbados is, however, the main provider of funding
for TVET. Most funds are spent on pre-employment education and on-the-job training.
Acknowledging the importance of TVET to the development of Barbados, the Government is
committed to:

Improving salaries to attract instruction with good technical and teaching skills (e.g.,
a degree programme at the Barbados Community College, National Development Scholarships).

Catering for the specific needs of disabled persons and consequently providing related
equipment and training of instructors with the aim of increasing the number of disabled
persons involved in the TVET programmes.

Subsidizing costs of on-the-job training, especially for small enterprises. Tax
incentives are also provided for training and a training levy has been used to finance
public training.

Providing greater opportunities for women in TVET including the offering of programmes
outside of traditional hours as well as day-care facilities for their children.

Enhancing re-training programmes for retrenched workers providing them with skills for
re-entry into the job market.

The major objective of the Government of Barbados is to improve the
quality of life of its citizens. It is with this focus that it seeks to create an
environment where its citizens can thrive and where the human resources can be carefully
developed to match skills with the requirements of the country.

The vision for education is firmly grounded in the understanding that a
nations human resource development serves as a catalyst for economic, political and
social growth. Hence, there are substantial, on-going efforts to improve and maintain the
quality of education at all levels: Early Childhood Education, Primary Education,
Secondary Education, Tertiary Education including Technical and Vocational Training and
Adult and Continuing Education.

Unemployment in Barbados as in the rest of the Caribbean has been a
source of major concern since the early post-emancipation period. In many ways, it can be
considered a primary social problem since many of the other social concerns such as
poverty and crime have their genesis in, or are related to the problem of unemployment.
Although concern about policy formulation to deal with the unemployment problem is
probably as old as the problem itself, modern policy approaches derive mainly from the
social, political and economic crisis of the 1930s and the subsequent Report of the Moyne
Commission which made specific proposals in relation to solving the unemployment problem
and improving the circumstances of the unemployed. Since then, the commitment to policies
to alleviate the unemployment situation has been central in national development planning
and successive governmental administrations.

This commitment has seen the emergence over the years of four basic policy approaches
to employment:

Job creation strategies such as economic diversification into potential growth areas and
more recently micro-enterprise development.

Job counseling, recruitment and placement programmes directed at matching labour to
available jobs.

Social security measures to provide some level of income maintenance to those displaced
from employed labor through unemployment.

Job creation

Job creation remains the major thrust in policy approaches to the
unemployment problem in Barbados and is intended, like job creation strategies elsewhere,
to increase the demand for labour. From the mid-1950s to the end of the 1970s the major
thrust was on the manufacturing and tourism sectors based on a wave of legislation. The
main objectives of this legislation were: the creation of the appropriate institutional
framework, hence the establishment of the Barbados Development Board (1955) which was
later streamlined with the establishment of the Industrial Development Corporation in
1969, and the development of a package of fiscal incentives designed to attract foreign
investors. These policy initiatives while not living up to all expectations were
nevertheless responsible for substantial employment generation over this period.

Since the early 1980s the focus has shifted to manufacturing and the
offshore financial and information technology sectors. A recent review of employment
policy in Barbados (ILO, 1999) notes:

The growth of the offshore financial and information technology sectors
are clear indications that Government policies have had some degree of success It
would appear that the deliberate policy of placing special emphasis on those manufacturing
activities which would promote export-led growth has been the major factor. In the
financial offshore sector, the deliberate policies in the early 80s and the structural
adjustment measures in the 90s, contributed significantly to this sector.

The main policies in the focus on increased efficiency and export
orientation of manufacturing were:

Developing human resources

needed for an export-oriented manufacturing sector
through the provision of certified skills training at the middle management, supervisory
and clerical levels.

Export promotion

by means of facilitating existing industries into an export phase
of their development, rather than a stimulation of new investment in export industries. To
this end, the Barbados Export Promotion Corporation became operational in 1980.

Fiscal incentives for companies penetrating (new) export markets

which include
provisions in the tax laws.

The introduction of an Export Guarantee Scheme

operated by the Central Bank of
Barbados which operates as a pre- and post-shipment mechanism, guaranteeing the major
portion of a commercial banks financing of an export order.

Securing preferential market access for export companies

through agreements such as
CARICOM, Lome, CBI, CaribCan and the CARICOM/Venezuela Agreement. (ILO, 1999).

From the early 1980s the Barbados Government determined that attracting
international business would be a pivotal plank in its macro-economic policy and developed
a body of legislation to facilitate the establishment of foreign businesses. This
legislation provided for fiscal concessions to:

International business companies

Offshore banks

Foreign sales corporations

Exempt insurance (captives)

Exempt insurance management companies

Societies with restricted liabilities

Trusts

Of these, only the offshore banks and foreign business companies are
required to pay taxes and all are exempt from exchange controls. Apart from these
legislative provisions, the attractiveness of Barbados as an offshore location for foreign
business is a network of double taxation treaties with a number of countries including the
United States, Canada and the United Kingdom. As a result, dividends paid to foreign
companies out of income earned form an active business in Barbados is considered
"exempt surplus" and is therefore not subject to tax in the foreign country.
(ILO, 1999). The data presented in Annex 2 on the sectoral
distribution of employment suggests some level of success with this policy.

Within the last decade micro-enterprise development has emerged as a
pivotal plank in employment policy as government sought to create the appropriate enabling
environment through a range of institutional developments. As Box 3.4 shows, Barbados now
boasts an impressive range of institutions providing facilitating services for
micro-enterprise development. This thrust has been reiterated as recently as in the 1999
manifesto of the governing party stating that: "economic empowerment and
enfranchisement of small businesses is a critical dimension of our strategy to create full
employment and to eradicate persistent poverty" (BLP Manifesto, 1999).

This newly heightened support for micro-enterprise development is
basically due to several initiatives taken by the Government of Barbados to provide
support for self- and wage-employment. The existing institutional framework delivers
services and support in the following areas of action:

Education and training

Information

Financing

Technical and other assistance.

Education and training

In recent years, a growing number of TVET activities have been aimed at
micro- and small enterprises (see discussion under TVET in section on education policy).
These include the Barbados Community College, the Samuel Jackman Prescod Polytechnic, the
Barbados Vocational Training Board and the Barbados Institute of Management and
Productivity. In addition, the Youth Entrepreneurship Scheme offers mentorship training
and a comprehensive programme of personal development, business planning and management
whereas the Barbados Youth Business Trust (BYBT) offers training programmes assisting
young people in developing the necessary skills and attitudes to become successful
entrepreneurs. The BYBT also provides micro-credit and a personal mentoring programme
along with advisory and marketing support.

Financing

Although a number of establishments offer traditional debt financing, a
wide range of non-traditional financing, including equity financing has emerged in recent
years. Specifically targeted programmes offer a range of financial services such as:

Loans up to $50,000 for fixed and work capital with interest rates ranging from 4 to 12
per cent per annum and pay back periods of 1 to 7 years.

Comprehensive credit packages which include counseling and consulting services, personal
mentoring, advisory and marketing support services.

Guarantee fund offering a security facility for small and medium enterprises or
protection to financial intermediaries against losses arising from the failure of
borrowers to repay their loans.

Investment financing

The general financial facilities and services which are available to
all enterprises in Barbados fall into four categories: the schemes run by the Central Bank
of Barbados, the facilities offered by commercial banks, the Barbados Investment Fund and
those financial facilities offered by the Barbados Investment and Development Corporation.
With the closure of the Barbados Development Bank in December 1995, two new financial
entities were established: Enterprise Growth Fund (for venture capital) and Fund Access
(for loans).

Technical assistance and business information

These are provided by a number of agencies in Barbados. For
micro-enterprises the Small Business and New Enterprise Development Centre of the BIDC is
the most important source of support in this area. Others include the Caribbean
Technological Consultancy Services Network, the Small Business Association, the Barbados
Manufacturers Association, the Barbados Chamber of Commerce and Industry, the Youth
Enterpreneurship Scheme, the Barbados Agency for Micro Enterprise Development Ltd., the
Barbados Youth Business Trust, the Ministry of Industry, Commerce and Business
Development.

The Government has announced its intention to pass a Small Business
Development Act as an instrument to create a stable and favourable environment for
micro-enterprise development. The Act will deal with the provision of a broad range of
incentives and facilities to micro-enterprises in the areas of direct and indirect tax
incentives, work space or plant facilities, simplified access to services, financial and
special incentive schemes to which large enterprises are already entitled. In addition a
Small Business and New Enterprise Centre is already under construction and there are plans
to expand micro-credit and the full range and facilities for micro-enterprises (BLP
Manifesto, 1999).

Box 3.4

Entrepreneurial development service providers

AGENCY

DATE ESTAB.

DESCRIPTION OF SERVICES

Barbados Investment
& Development Corporation (BIDC)

Dec. 1972

The Small Business and New
Enterprise Development Centre provides a comprehensive support system of office services
and facilities, technical assistance and financial feasibility analyses, information,
business counseling and the development of business plans for the small business sector.
The centre has access to the BIDCs design centre and its research and export
Marketing Divisions.

Barbados Investment Fund
(BIF)

July 1992

Established by the Central Bank of Barbados
and Caribbean Financial Services Corporation it provides equity investment of no more than
$600,000 in the form of common or preferred stock or a combination of both. This equity
funding is for start-up and existing businesses in areas such as manufacturing,
agro-industry, tourism, employment, enterprises generating or saving foreign exchange and
related enterprises considered to be viable.

Barbados Institute of Management and
Productivity (BIMAP)

(Small Business Management Training  1973)

(Entrepreneurial Development Training Course  1988)

Jan. 1972

Training course in Entrepreneurial Development
and a Small Business Management Training Programme for owners, managers and key employees
to improve understanding of operating a business effectively. Customer Management to equip
sales staff and key employees with the skills and techniques to provide good customer
service, Computer Applications for Small Business designed to provide hands-on experience
in the use of basic computerised business applications to enhance productivity and
profitability. BIMAP also conducts one-day seminars that deal with small business
start-up, simple book-keeping and accounts, negotiating loans, controlling expenses,
product pricing and effective selling and marketing.

Barbados Youth Business
Trust (BYBT)

Oct. 1996

BYBT Provides micro-credit up to $30,000 to
cover start-up or expansion costs. $1000 loan/grant to cover feasibility studies, market
research or continuing education in Barbados, In addition, personal mentoring and advisory
and marketing support services are offered to assist young people between 18 and 30 years
old to develop the necessary skills and attitudes to become successful entrepreneurs.

Enterprises Equity
Growth Fund Limited

Jan. 1998

Provides equity investment
of $50,000 - $500,000 for small and medium sized business that are in the start-up or
expansion phase. Funds are to assist in meeting medium and long-term capital requirements
and to provide a broad range of technical services. Funding is available for any
meaningful business venture whose activities will enhance Barbados foreign earnings
capabilities and generate employment. However preference is given to companies with strong
growth and profit making potential. Technical assistance in accounting, marketing and
consultancy is provided to approved invested companies on a grant basis.

Barbados Agency for Micro
Enterprise Development Ltd. (Fund Access)

Dec. 1997

Provides
micro-credit up to $30,000, general business counseling, technical assistance and
accounting services. Each client participates in a two-day micro-enterprise training
programme which covers confidence building, honouring commitment, marketing, cash
management, costing and pricing, record- keeping, break-even analysis and motivation for
success and goal setting. The programme is designed to help persons develop necessary
skills and attitudes so as to become successful entrepreneurs.

AGENCY

DATE ESTAB.

DESCRIPTION OF SERVICES

Rural Development Commission

Mar. 1996

Provides maximum loans of
$100,000 for start-up, expansion and restructuring of small businesses involved primarily
in agriculture, however, consideration is given to any meaningful, viable business
venture.

National Employment Bureau (NEB)

1955

Provide the following
services to job seekers: aptitude tests, counseling of workers at any level, advice on
training and training opportunities, recruitment, screening and referral of qualified
applicants to job vacancies, follow-up counseling after placement. Special services are
provided for ex-offenders, the disabled and young persons which include job clubs, work
groups, job seminars, NEB also recruits persons for the farm labour programme.

Offers a course in small
business management which covers the role of small business in the economy, mistakes and
how to avoid them, buying a going-concern, acquiring a franchise, organising the business,
legal and structural aspects of the business, financing the business, policies for new
businesses, for merchants and small manufacturers, management and leadership.

Technical &
Vocational Education & Training Council (TVET)

Dec. 1993

Administers the Employment
and Training Funds which offers grant or loans to institution or companies to train staff.
The limit of the grant or loan amount is not specified by TVET but are granted based on
the proposed needs of the organization.

Urban Development
Commission

Aug. 1997

The Urban Enterprise
Programme provides micro-credit up to $25,000 for start-up and expansion cost of small
businesses with a view to reducing the high unemployment in urban areas through the
development of a sustainable micro business sector.

Youth Entrepreneurship
Scheme (YES)

Aug. 1995

Provides entrepreneurial
development training in building self-confidence, motivation, business etiquette, customer
management, marketing management, accounting and financial management, time management and
business planning. Personal mentoring, legal support and technical assistance in the areas
of financial management and marketing are also offered. Access to start up or expansion
capital and business consulting to assist young people between 18 and 30 years old to
develop necessary skills and attitudes to become successful entrepreneurs are also part of
YES service package.

Training

The use of training as a policy approach to unemployment is based on
the assumption that lack of appropriate training and skills by individuals is one of the
main reasons for their unemployment. In Barbados this basic policy approach dates back to
1924 with the establishment of the Board of Industrial Training and the passing of the
Apprenticeship and Bursaries Act in 1928. Since then a variety of legislative measures and
programmes have been introduced to facilitate the process including the establishment of a
Technical Institute in 1955; the development of the polytechnic (now the Samuel Jackman
Prescod Polytechnic) in 1969; and the Skills Training Programme in 1978.

Registration, counseling, recruitment and placement

The third major policy approach to the problem of unemployment in
Barbados is based on the attempt to match available labour to available jobs through a
process of recruitment, registration, counseling and placement. These services are
administered by the National Employment Bureau which was established in 1983 to replace
the Employment Exchange which had been set up in 1958. The Bureau has four major
dimensions: the registration and placement of job seekers in the local and overseas
markets; vocational guidance and counseling; services to employers; and special services.

With respect to the registration and placement of job seekers overseas,
the placement has generally been with the farm labour programmes in the United States and
Canada although more recently placements have also been made with the Canadian Live-in
Care Giver Programme and with U.S Cruise Ship companies. As the data in Table 3.4
indicates there has been a substantial fall off in respect of registrations although the
number of placements has been relatively steady at over 600. Registration and placement in
the local market has been less impressive although the number of placements have been on
the increase in recent years.

In terms of vocational guidance and counseling, the Bureau offers a
variety of services including assistance with the preparation of curriculum vitae and
interviewing techniques for young people. The most recent data available indicate that in
1996 some 1,322 interviews were conducted for the purpose of initial screening, job
referrals, guidance and counseling. In addition, the Bureau continues a range of
vocational guidance activities including school visits and job clubs where persons are
advised on career choices, the world of work, job search techniques, employer expectations
and workers rights

Table 3.4

Local and overseas registrations and placements by Labour Department
1992-1998

The Bureau also offers special services to certain target groups
including ex-offenders, the disabled, young persons, returning nationals and workers who
have been severed. In respect of employers, the Bureau makes visits to business
establishments in order to promote its services and offers advice in drafting job
advertisements; recruitment, screening and referral of qualified applicants; assessment of
job seekers through proficiency and aptitude testing; counseling of employees; training;
and labour market information.

Unemployment insurance

Concerns about making social security provisions for the unemployed
date back to the 1930s when in 1936 a Pension Committee was established to examine
the possibility of introducing an old age pension scheme and a system of unemployment
insurance. While the Committee went on to formulate proposals for a system of old age
pensions, its response to the idea of an unemployment insurance scheme was not
encouraging. The matter was raised again in the Richardson Report (1954)and
the Stockman Report (1962) but even though such a scheme was recognised as
desirable, it was generally felt that the economy could not support it. In addition, there
was strong opposition to such an idea from business interests which maintained this was
too heavy a burden for them to bear.

The Unemployment Benefit Scheme was introduced in 1981 as a branch of
the National Insurance and Social Security Scheme. The objective of the Unemployment
Benefit Scheme is to provide compensation to employees who either because of total
unemployment, lay-off or short-time suffer loss of earnings. The Scheme covers total or
partial loss of earnings even though the contract of employment continues to exist and is
a critical part of the safety net programme existing in Barbados. Indeed, Barbados is the
only country in the region with an unemployment benefit scheme [see Box 5].

Coverage is provided for individuals aged 16-64 years who normally work
for an employer. However, permanent government employees, self-employed persons and
persons never insured under the National Insurance Scheme are not covered. The Scheme is
financed by way of contributions shared equally between employee and employer and
contributions currently fixed at 1.5 per cent of insurable earnings are collected as part
of the usual national insurance contributions. Over the years there have been adjustments
to the contribution rate which reached as high as 5.5 per cent of insurable earnings in
1991. It was subsequently reduced to 3.0 per cent in 1994 and again by half to its current
rate based on an actuarial recommendation in 1998.

According to the NIS Guide to Benefits (1999), to qualify for
unemployment benefit one must:

Have been insured for at least 52 weeks;

Have at least 20 contributions paid or credited in the three consecutive quarters ending
with the quarter but one before that in which unemployment began;

Have at least 7 contributions paid or credited in the quarter but one preceding the
quarter in which unemployment commenced.

The daily rate of unemployment benefit is 60 per cent of the insured
persons average insurable weekly earnings divided by six. The same principle applies
in the case of an insured person who has been laid off or kept on short time. Under the
regulations, two or more periods of unemployment which are not separated by more than
eight weeks are treated as one continuous period of unemployment and the same rate of
benefit is payable for the entire period.

Table 3.5

The unemployment fund  Contribution and benefit payments,
1994-1998

Year

Contributions
$M

Benefits
$M

Surplus/Deficit (-)
$M

%
Difference

1994

36.9

13.3

23.6

63.9

1995

35.9

11.0

24.9

69.4

1996

39.5

14.7

24.8

62.8

1997

42.7

16.5

26.2

61.3

1998

41.8

20.3

21.5

51.5

Source: Barbados. Report on the Unemployment Benefit Scheme, 1998

.

Table 3.6

Total claims approved and persons benefiting 1994-9998

Year

No. Claims
Paid

No. Persons
Benefiting

1994

10,775

8,907

1995

7,607

7,460

1996

10,135

9,185

1997

10,416

8,969

1998

12,275

9,478

Source: Barbados. Report on the Unemployment Benefit Scheme, 1998.

The unemployment benefit is payable for each day of unemployment
(excluding Sundays) as long as the unemployment continues, subject to a maximum of 26
weeks in any continuous period of unemployment; or for an aggregate of 26 weeks in the 52
weeks immediately preceding the commencement of the current week of unemployment. A person
who has exhausted entitlement to unemployment benefit does not become entitled again until
the expiration of 52 contribution weeks from the benefit payment.

The Report on the Unemployment Benefits Scheme (1998) indicates
that $20.3 million in benefits were paid in 1998, an increase of $3.7 million or 22.7 per
cent over the $16.5 million paid in 1997. The Report indicates that benefit payments were
less than contribution income for the seventh consecutive year and the reserves in the
Unemployment Fund stood at a healthy $103.9 million. [see Table 3.5]. The
data presented in Table 3.6 show that a total of 12,275 claims were paid in 1998
with 9,478 persons benefiting.

Although the history of governmental involvement in the housing market
dates back to the late nineteenth century, the foundation of modern housing policy was in
the post-1930s. In the wake of the 1937 riots, the Moyne Report (1939), the Housing
Board Report (1943) and the Stockdale Report (1946) all highlighted the continuing
problems of dilapidation, overcrowding and insecurity of tenure and proposed a mix of
public and private sector responses for their amelioration. In the immediate post-war
period the focus of housing policy was on building and health regulations; owner
occupation; the rental sector and housing welfare.

The Tenantries Freehold Purchase Act (1980) has been identified in the White
Paper onHousing, 1997as "one of the most revolutionary
pieces of social legislation in the history of [Barbados]". The Act enabled persons
residing on a tenantry for at least five consecutive years or five out of the last seven
years to purchase the freehold of their lot. In the case of plantation tenantries the
price was set at 10 cents per square foot. This Act has led to hundreds of Barbadians
being able to own their house-spots for the first time.

In the post-Independence period Barbados has experienced some
transformation in the quantity and quality of its housing stock. This transformation has
been island-wide and has helped to reduce the rural-urban distinction which was
particularly visible in the past. Overall improvements in income levels occasioned by
human and physical resource development has

contributed to better living standards and increasing expectations.
Government has facilitated the process by direct investment in the provision of housing as
well as a range of policy initiatives to encourage private sector/individual building of
houses. This has created the foundation to improve the provision of housing and to
encourage home ownership.

Growth and quality of housing stock

The census data for 1970 to 1990 indicate that the housing stock grew
by 16,572 (28.3 per cent) to reach 75,170 units as at 1990. This represents an average
annual growth rate of 1.3 per cent per annum over the period. Though there was some slow
down in the growth rate during the second decade, the existing housing stock still grew by
an average of 766 houses annually.

The proportion of wooden houses to total houses for the entire country
declined from 75.3 per cent in 1970 to 39.9 per cent in 1990. While wooden houses still
accounted for the single largest category of houses, the growth of concrete and wood and
concrete houses was spectacular over the period. In 1970, concrete-block houses were 10.8
per cent of total houses as opposed to 35.5 per cent in 1990. Similarly, wood and concrete
houses moved from a mere 4.4 per cent to 21.3 per cent over the same period. According to Habitat
II  The Barbados National Report and Plan ofAction (1998),the
increasing trend towards the building of wall houses is rooted in socio-economic factors
such as the desire to avoid the stigma associated with living in a chattel house; the fact
that wood is expensive and susceptible to termites thus making maintenance costs high; and
the fact that wooden structures are more prone to fire and therefore relatively more
expensive to insure.

The growth in the number of houses was accompanied by improved quality
housing as evidenced by the movement away from wood structures. This move toward wall
structures was supported by improvements in other housing conditions such as electrical
lighting, gas for cooking and water toilets. At 1991 some 92.6 per cent of the housing
stock had electrical lighting, 84.5 per cent used gas for cooking, 93 per cent were
equipped with tap water and 66.3 per cent had water-borne toilet facilities.

Fiscal measures

Over the past two decades much of the emphasis of the Government has
been on the implementation of a number of fiscal measures aimed at promoting home
ownership, the maintenance of the housing stock and facilitating the construction of
houses by the private sector. These measures included:

The provision of allowances on income taxes for payments to mortgage interest which
varied from a deduction of $6000 at its inception in 1979 to full deduction in 1986. The
deduction was discontinued in 1992 as a consequence of the structural adjustment programme
and restored in 1995 with a ceiling of $3500.

The provision of a rebate to developers who construct single or condominium units for
sale in any fiscal year;

The implementation of a sliding scale for land tax payments with the objective of
reducing the cost of home ownership;

The modification of the property transfer tax regime to assist local purchasers in
buying houses;

The granting of allowances to house-owners who convert their units form ownership to
rental purposes;

The provision of a tax allowance of 20 per cent of the rents paid during the year up to
a maximum of $1800;

The provision of tax allowances for the maintenance, repair and/or improvement of
dwelling units. In relation to chattel houses this measure makes provision for the
installation of water and plumbing in preparation for the full conversion of the unit from
wood to concrete. The level of allowance increased from 4 per cent of the improved value
to full deduction in 1986.

The adjustment of water rates and the associated costs of the service to beneficiaries
in an effort to make the service more cost effective while at the same time assisting
households in affording it.

In the area of housing finance, the major indirect intervention has
been through the manipulation of the mortgage interest rate. The Central Bank of Barbados
which determines monetary policy is responsible for regulating the prime lending rate and
with regard to mortgages has, from time to time, shifted the mortgage rate. Since mortgage
agreements in Barbados contain a variable interest rate clause which permits adjustment in
the interest rate at three months notice, the Central Banks involvement in
setting these rates can force lenders to lower the rates on existing mortgages regardless
of the cost of money. Since 1976, the Central Bank has intervened on a number of occasions
to alter the rate.

A number of initiatives have also been undertaken to facilitate home
ownership among lower income groups. For example, the government has also amended the
General Workers Housing Loan Scheme to extend the loan repayment period from twenty to
forty years. Similarly, through the Barbados Mortgage Finance Company, the government was
able to finance the construction of timber units granting mortgages for up to fifteen
years compared with its commercial counterparts whose maximum loan period was seven years.

In terms of direct interventions, the major measures have included: a
$20 million loan to the Barbados Workers Union for a mortgage financing scheme; an
allocation of $8 million to the National Housing corporation for on-lending to
beneficiaries for housing construction and repairs; providing $4 million to the Barbados
Mortgage Finance Company; disbursement of more than $10 million in loans under the General
Workers Housing Loan Fund (Labour Welfare Fund); guaranteeing the full payment of
principal and interest on mortgages to owners of chattel houses; providing $20 million
under the Housing Guarantee Programme for on-lending through private sector institutions
for housing related purposes to households whose incomes were below the median level.

Institutional development

Apart from its intervention through fiscal and financial policy, the
Government has been adapting its institutional structure to meet the housing challenge.
While these changes have been mainly to facilitate its direct interventions, some were
also intended to facilitate housing policy formulation and to achieve a systematic
approach to social policy planning in the area of housing.

The National Housing Corporation was created in 1973 to replace the
Housing Authority and the Urban Development Commission thereby assuming responsibility for
all property and liabilities of the two entities. The Corporation has very broad
responsibilities and has developed several programmes to realise its objective of housing
development, including a maintenance programme for its property, a house-building
programme with units being constructed for sale and rent and a sites and services
programme.

The public rental house construction programme is the principal element
in Governments direct intervention in the housing market. In this respect, the
National Housing Corporation currently controls approximately 30 per cent of the
nations rental stock  a proportion indicative of the significant involvement
of the Government in this area of housing. The underlying philosophy of this programme is
that it affords Government the opportunity to fulfil its social obligation to upgrade the
living conditions of low-income families.

The public rental house construction programme was financed by the
National Housing Corporation largely through annual subventions from the Central
Government since the rents were heavily subsidized and rental income was insufficient to
finance the programme. Disbursements to the programme ranged between $5 million and $8
million annually when the programme was at its most intensive in the 1980s. This funding
was discontinued in the late 1980s and into the early 1990s during the period of
structural adjustment and restarted after this period ended.

Associated with this house-building programme for the rental sector is
an active maintenance programme including carpentry, masonry, plumbing/sanitary and
electrical repairs. This programme also includes the upgrading of older units in order to
comply with revised minimum acceptable building and health standards such as, for example,
the replacement of asbestos roofs of the earlier rental units. At the same time the
Corporation is also involved in the provision of water borne facilities in units once
served by pit latrines, the replacement of wooden floors with masonry and the upgrading of
the plumbing and electrical components in some of the older units. In response to high
maintenance costs and increasing levels of arrears the Corporation has implemented an
interesting policy of selling rental units to their occupants on favourable terms whereby
a proportion of the rent paid is applied to the purchase price with the result that more
than 90 per cent of the single units available to occupants have already been sold.

While the building programme has generally been financed by injections
of funds from the Central Government, the maintenance programme whose annual cost averages
$3million is financed largely by rental income. On average, the combined house and land
rent collected accounts for 65 per cent of the annual income of the Corporation with house
rent contributing the greater share, representing some 90 per cent of total income.

In response to increasing demand and limited public sector financial
resources, and guided by a philosophical approach which sought to encourage greater
private sector participation, the Corporation has initiated joint venture programmes with
private contractors. There is, for example, an active "sites and services"
programme in which Government services the lots while private builders construct houses
for sale on them. The building programme also includes the relocation of houses, the
rental of houses and house spots and the insurance of rental units.

The implementation of the "starter house" programme in 1985
represented an innovative attempt to address the issue of affordability. The concept
builds on the traditional approach to housing construction while at the same time
addressing certain difficulties in the market. An analysis of prevailing market forces in
the lower middle and below income groups suggested that the financial outlay necessary to
cover up-front expenses inclusive of the initial mortgage down payment and transactional
costs were cumulatively beyond their means. In addition, building contractors held the
view that the prototype masonry units, with a floor area of less than 600 square feet were
uneconomical to build and unmarketable. The demonstrated demand for the starter unit was
considerable and although the project was suspended during the structural adjustment
period of the early 1990s, it is now expanding rapidly.

Beyond its sale of property programme, the Corporation administers a
General Workers Housing Loan Scheme which seeks to enable general workers to:
construct or purchase a house; repair, alter or extend a house; relocate a house; purchase
land; and discharge mortgages. For the purposes of the Act, a "General Worker"
is defined as a person working for less than $502.00 per week and the worker is entitled
to a maximum loan of $40,000.

The Housing Credit Fund was created in 1983 to administer the USAID
Guaranty Loan. The primary objective of this fund is to provide housing finance for
persons who would not ordinarily be able to access traditional sources of funding. Its
principal responsibilities are to:

Distribute funds through private sector housing financing agencies;

Support programmes for home improvement, new house construction and the Purchase of land
under the Tenantries Freehold Purchase Act;

cover all funds lent to financial institutions;

Provide through reflows, a pool of funds for continued lending in the housing sector.

The Fund has become actively involved in a number of successful
projects which support house construction and by the end of 1998 had disbursed
approximately $31 million in loans through financial institutions such as commercial
banks, mortgage companies and credit unions. The Housing Credit Fund has therefore become
a major force in the mortgage/finance market even though its qualifying limits in terms of
the annual salary of applicants requires constant revision in view of progressive salary
increases.

The Housing Planning Unit was established in 1979 to enhance the
developmental and planning skills within the Ministry of Housing. Initially, the Unit was
charged with the responsibility of preparing a development plan for housing and to develop
and manage specific programmes within the context of the plan. However, the duties and
responsibilities of the Housing Planning Unit have now expanded to include all elements of
policy formulation and planning for the housing sector as well as project implementation
and coordination. With the expansion of Governments direct intervention in the
housing market and the passage of the Tenantries Freehold Purchase Act (1980), the Unit
became the executing agency for Government legislation. The Housing Planning Unit also has
general responsibility for the administration of the Housing Credit Fund. The Unit now
maintains a database of all qualified tenants and through the National Low Income Project,
roads are constructed, electricity and water installed and serviced lots created for sale
to persons who meet the agreed criteria.

The demand for housing

The Division of Housings estimates for 1995 suggested an annual
need for approximately 3,500 houses to satisfy the requirements for new units and for
replacements to the existing housing stock for whatever reason. For much of the late 1980s
and early 1990s, 70 to 80 per cent of this estimated need was met through annual increases
to the stock of approximately 2,300 units, suggesting an annual deficit of some 1,200
units.

Housing for disadvantaged groups

The Poor

The White Paper on Housing (1997) states that "fulfilling
the housing needs of disadvantaged groups creates the greatest challenge to
Governments goal of providing adequate shelter for all by the year 2000". This
assessment is based on data presented which show that some 36,000 persons, or 34 per cent
of the labour force, earn less than $200 weekly which automatically excludes them from
acquiring housing in the formal market both in terms of affordability and qualification.
Another 27,000 earn between $200 and $300 weekly, accounting for 25 per cent of the labour
force. In relation to households, results of a survey of the urban area where some 40 per
cent of the population live indicate a median household income of $14,000. Based on these
data, it is clear that in the absence of cheaper housing or some form of subsidy to assist
select households, some 60 per cent of Barbadians would be unable to afford a home in the
formal market since their income would disqualify them from either purchase or available
mortgages.

The needs of the poor are currently being addressed by the Welfare
Department, the National Assistance Board, the National Housing Corporation, and more
recently, the Poverty Alleviation Programme. In addition, a number of voluntary agencies
such as the Salvation Army and a number of other churches are involved in the effort at
housing the "poor". The Welfare Department deals with the indigent and in this
respect the rents in public sector housing units are paid for qualifying persons. The
National Assistance Board builds and repairs houses for the elderly poor and the indigent
at a non-cost recoverable basis. There are currently more than 500 welfare houses while
the Board repairs approximately 200 annually. The National Housing Corporation builds and
manages rental units which it allocates to applicants who earn less than $2,178.65 per
month.

Apart from the elderly poor, the pattern of housing among the growing
elderly population is also a matter of concern. A feature of the housing patterns of this
group relates to their sole occupation, very often of large homes resulting in the
under-utilisation of space, loneliness, lack of care and associated problems. In addition,
maintenance of homes presents a real challenge for this group: since pensions are often
inadequate even to meet immediate basic needs of food and clothing and their housing
circumstances are characterised by increasing dilapidation.

There has been a rapid increase of private sector elderly care
facilities and nursing homes over the last two decades but they generally operate at
capacity and cannot satisfy the total demand. Barbados has been experiencing an ageing of
its population over the past two decades, and this may increase the demand for such
facilities. The National Assistance Board provides the Black Rock Hostel and the Golden
Rock Home for elderly persons who have either been abandoned or are incapable of taking
care of themselves or whose houses are in a dilapidated state; however these are of
extremely limited capacity. The major challenge now facing Government is to produce units
that are designed to meet the needs of the elderly in environments which allow them to
maintain an independent lifestyle without losing community support.

The homeless

Though homelessness in Barbados is not a large-scale problem, it is
still a major cause for concern given the nature of the problem. Most of the cases are
related to mental health problems, drug use, house fires, evictions or basic poverty. The
latter three cases are normally addressed through the emergency efforts of the social
welfare agencies. Most of the mental health and drug abuse cases entail a different type
of homelessness where those affected are voluntarily homeless, roaming and living off the
streets.

The Sir Clyde Gollop Shelter which is operated under the aegis of the
National Assistance Board provides night shelter for persons, and the Salvation Army is
currently in the process of rebuilding its hostel after the old one had been demolished
after becoming derelict. The most recent development has been the establishment of a
multi-disciplinary Task Force on Homelessness whose terms of reference are to:

Inquire into the problems of homelessness, vagrancy and beggars in Barbados;

Make recommendations to the Government through the Ministry of Health and the
Environment for solutions to these problems; and

Develop a draft policy framework and approach on the issues of vagrancy, homelessness
and begging.

Battered women

The reported incidence of battered women has been increasing even
though, as elsewhere, the problem is thought to be highly under-reported. This problem
cuts across all social groups and often involves children. One of the major challenges
facing such a shelter is the issue of confidentiality since the island is so small.
Nevertheless, a shelter has been opened in 1999 mainly through the efforts of a private
sector agency  the Business and Professional Womens Club.

The role of Government in the housing sector has therefore gradually
shifted over time from that of direct provider to facilitator resulting in the
establishment of a number of institutions to create this enabling environment. A number of
indirect measures have also been used to influence housing market forces. On the other
hand, the role of direct provider is largely effected through the operations of the
National Housing Corporation which caters primarily to lower income and vulnerable groups.
The available data suggest that the housing conditions in Barbados have improved
significantly over the past three decades [see Table 3.7].

The White Paper on Housing (1997) has identified the major
housing issues in Barbados as those related to the land market, the structure and
conditions of houses, insurance, housing for disadvantaged groups, the building industry,
the housing finance market and urban renewal. It is within this context that the goals and
strategies to respond to these issues have been articulated together with the appropriate
implementation mechanisms (see Annex 3).

This century has seen a dramatic increase in both the number and
proportion of the elderly (65 years and over) in Barbados as the country moves along the
demographic transition creating a population profile which, in many respects, more closely
approximates that of a developed than developing country. A number of factors including
declining mortality rates, declining fertility rates, age selective migration and
increased life expectancy have created a situation where the elderly are now estimated to
account for 15 per cent of the total population of Barbados.

Chart 3.1

Source: Barbados National Report on Population,1994

The first half of the twentieth century essentially saw a continuation
of the limited social policy response to the social circumstances of the elderly that had
characterised the early post-Emancipation nineteenth century. The needs of the elderly
were met at three basic levels: family and self-help; private philanthropy; and limited
governmental provision primarily through pensions, poor relief and residential care. The
available survey data indicate that poverty, social isolation and a wide range of social
psychological problems confront the elderly, and as the elderly population increased their
needs became more glaring and the imperative of social policy response more urgent. The
post-Independence period, therefore, and particularly the last two decades of the
twentieth century saw a much more deliberate and organised response to the needs of the
elderly.

Financial assistance

The main elements of financial assistance for the elderly are through a
range of pensions and benefits which fall under the National Insurance and Social Security
Act and are administered by the National Insurance Board. The formalised system of social
insurance which now exists emerged in 1966 after decades of debates and reports and now
makes provisions for the following benefits in respect of the elderly: old age pensions
and grants (contributory and non-contributory), funeral grant and survivors benefit.

Although the non-contributory old age pension dates back to the days of
nineteenth century poor relief its formalisation came with the Old Age Pension Act of 1937
which offered means-tested provisions for persons aged 68 years and over. After several
years of administrative change this scheme was finally brought under the National
Insurance Board in 1982 in order to streamline administrative efficiency with the
contributory pension. To qualify for a non-contributory old age pension a person must have
attained the age of 65; be a citizen; or a permanent resident of Barbados within the
meaning of the Immigration Act and satisfy certain residential requirements. Persons are
not entitled to a non-contributory pension if they are in receipt of a public service
pension or a pension under the National Insurance Scheme (NIS) at a higher rate. The
current rate for the non-contributory pension is $80.00 per week and the total value of
pensions paid out under this scheme in 1998 was $52,961,256 [see Annex
4].

The larger NIS Scheme under which the contributory pension falls is
based on contributions at the rate of 17.5 per cent of insurable earnings paid jointly by
employees (8 per cent) and employers (9.5 per cent). These pensions are available to all
those who have reached the age of 65, who have at least 150 contributions paid into their
account and who have paid at least 500 contributions. Benefits are calculated at 40 per
cent of average insurance earnings and supplemented by 1 per cent of total insurable
earnings of contributions in excess of the first 500 contributions, subject to a maximum
of 60 per cent of average insurable earnings. The minimum pension payable under this
scheme is $98.00 weekly and in 1998 a total of $110,774,585 was paid out in contributory
pensions [see Annex 4].

Survivors benefit may be either a grant or pension and is payable
to the spouse or children of a qualified deceased person if that person at the time of
death was receiving or was qualified to receive invalidity or old age contributory
benefit. If the deceased had qualified for a grant, the survivors benefit would be a
grant or lump sum payment, if the deceased had qualified for a pension the survivors
benefit would be in the form of a pension. In 1998 some 423 claims for survivors
benefit were processed and a total of $5,927,278 paid out [see Annex4].

The funeral grant is payable in respect of the death of an insured
person who at the time of death was in receipt of or had title to an old age contributory
benefit. The grant is also payable in respect of the death of the spouse of an insured
person to whom a grant would have been payable had he/she died, whether or not the spouse
had predeceased the insured person. The grant is payable to the person who has met, or is
liable to meet the cost of the funeral of the deceased person. In 1998, some 1,763 claims
for funeral grant were processed and a total of $1,325,019 paid out [see
Annex 4].

Private pension schemes - those arranged between employers and their
employees are of two basic types: public servants pensions and private sector pensions.
Private sector pensions consist of Employers Superannuation Plans which are usually based
on contributions by both employers and employees, and Annuity Pensions which are normally
purchased by self employed persons. Pensions for public servants emerged on an ad hoc
basis in Barbados and there are currently a variety of Acts and Regulations providing
pension benefits for civil servants. These pensions are payable to officers completing at
least ten years service and are non-contributory. The Barbados Estimates 1999/2000
indicate that in 1998/99 $82 million was spent on pensions and associated benefits for
public employees.

Institutional care

Like the pension schemes, the institutional care of the elderly grew
out of the "indoor relief" provisions of the early post-emancipation period.
Institutional care for the elderly is currently provided at the Geriatric and District
Hospitals, private nursing homes for the aged and homes for the elderly. A number of
factors related to the decline in extended kin support and support at the local community
level as well as the simple increase in the numbers of elderly persons have increased the
need for the institutional care of the elderly. The Geriatric Hospital and four District
Hospitals operate under the Ministry of Health to provide a service which aims at
assisting the elderly to lead full and active lives and to achieve the maximum capability
allowed by their physical, mental and social capacities. These hospitals provide
residential nursing care, day care, occupational therapy, recreation and rehabilitation
facilities. The demand for these facilities far exceeds the institutional capacity of
these institutions and there are lengthy waiting lists of persons, which have been growing
annually.

In addition to the Geriatric and District Hospitals, there are two
homes for the elderly and one Night Shelter which fall under the administration of the
National Assistance Board. The Senior Citizens Home at Golden Rock offers residential care
and support to elderly persons who can no longer cope in their homes or afford private
care. The Black Rock Hostel is officially for persons who are deemed homeless and provides
residential care while efforts are made to rehabilitate the residents back into the
community. The Sir Clyde Gollop Night Shelter, as the name suggests, provides night
shelter for 30 homeless persons, the majority of whom are elderly. Finally, there are a
number of private nursing homes and elderly care facilities offering residential care for
the elderly with some recreation and rehabilitation services. These are regulated by
health legislation and are partly staffed by nursing personnel. The reality is, however,
that the fees associated with these facilities often push them outside the reach of the
working class elderly and their families.

In-kind benefits and community care services

A wide range of benefits and services are available to the elderly
outside of direct financial support and institutional care with the ultimate objective of
promoting community care and allowing the elderly to function outside of institutions. In
kind benefits are administered by the Welfare Department and the National Assistance Board
and include assistance with clothing, household furniture, wheel chairs, spectacles, food
vouchers, utility rates and land rent for those deemed in need. Although these benefits
are not intended for the exclusive use of the elderly, available evidence indicates that
they are used disproportionately by this group.

The Welfare Department and the National Assistance Board also
administer a number of schemes which are used exclusively or almost exclusively by the
elderly. These include the free bus pass scheme, assistance with food, housing welfare and
the Home Help Scheme. The free bus pass scheme allows all elderly persons aged 65 and over
to travel free on public transportation on showing the National Identification Card.

The National Assistance Boards housing welfare programme is
intended to repair or replace the houses owned by old age pensioners and other needy
persons. The National Housing Corporations housing welfare programme provides rent
free accommodation to NHC tenants aged 65 and over whose only source of household income
is the minimum state pension. The Welfare Departments housing welfare scheme, as
part of its social assistance programme, also offers rental assistance to needy tenants
including the elderly. In addition, the Soroptomists International senior citizens
village is the lone purpose built facility which has been established to provide
accommodation for independent, elderly persons at a nominal rental fee.

Assistance with food is provided in a scheme jointly organised by the
Welfare Department and the Salvation Army. This programme provides daily meals at the
Salvation Armys Food Centre as well as a meal delivery service for elderly persons
who cannot travel to the centre. The Home Help Service which is the most explicit approach
to community care of the elderly was established in 1980 with the objective of providing
care to the indigent elderly in their own homes thereby avoiding the resort to costly
institutional care. The programme which was transferred to the National Assistance Board
in 1981 offers assistance in the preparation of meals, cleaning of houses, and the
provision of physical care and companionship to the elderly persons. The Home Help Service
provides care to more than one thousand elderly persons at an annual per capita cost
estimated at less than $2,000 (Roett & Joseph, 1998).

The National Assistance Board operates seven Day Care/Activity Centres
for the elderly across the island. Day care seeks to address some of the social problems
experienced by the elderly such as loneliness and isolation. The Board has deliberately
targeted rural communities in need of social stimulation and the programmes focus on
socialising, education, crafts and skills and environmental exposure through day trips,
picnics, tours and recreational activities. The centres cater to any individual over the
age of fifty and participants are required to provide their own materials, nutrition and
transportation. An encouraging outcome of this programme is that a number of elderly
persons attending the centres have been able to supplement their incomes through the sale
of art and craft items produced from the skills developed there.

Health services

Health care of the elderly must be seen in the context of the larger
health care system which is discussed in some detail in the section on health policy.
Specific mention must be made here, however, of the Barbados Drug Service which was
established in 1980. Under the special benefit service, persons 65 years of age and over
(along with persons under 16 and those receiving treatment for specified medical
conditions) are eligible to receive drugs free of charge or at considerably subsidised
rates.

In the context of the Caribbean, Barbados has an extensive media
network both in terms of print and electronic media. There is a long history of print
media in Barbados with published newspapers going back to the seventeenth century. There
are currently two daily newspapers with impressive circulation rates [see Table 3.8], one
of them  The Barbados Advocate  having been established in 1895. There are
also two weekly and one bi-monthly newspapers as well as a number of magazines on specific
social and economic issues such as business, young people and tourism that are published
regularly by the newspaper companies. In addition, a large number of NGOs and interest
groups publish monthly and quarterly magazines and newsletters with relatively substantial
national circulation. In terms of the electronic media, there are seven local radio
stations (one AM and six FM) and one local television station as well as access to cable
television through the local television station or by direct satellite connection.

Table 3.8

Average circulation daily newspapers in Barbados

Newspaper Company

Weekday

Friday

Sunday

Advocate

15,000

17,500

22,500

Nation

24,000

36,000

50,000

Source: Various sources. Compiled by author

The masthead of the Barbados Advocate carries the caption: For the
cause that lacks assistance; Gainst the wrongs that need resistance; for the future
in the distance; And the good that I can do. This message effectively captures the
contribution of the media in Barbados to the enabling environment for social development
in Barbados for apart from the relatively wide circulation and reach of the media in
Barbados, there has historically been a strong tradition of public education as well as
social, economic and political analysis. Both daily newspapers feature regular columns by
individual socio-economic and political commentators (including weekly columns by all
three major political parties) as well as structured inputs from a range of established
non-governmental organizations on specific interests. In addition, regulations in Barbados
reserve 10 per cent of broadcast time in the electronic media for the Government
Information Service which is primarily concerned with public information on areas of
governmental activity and public interest.

This relatively extensive media network has meant that the Barbadian
population has generally been well informed about national issues as well as international
developments which impact on national development. The average Barbadian has therefore
been able to bring a level of consciousness and awareness to national debate on issues of
socio-economic development that has ensured a level of consistency in policy-making that
might otherwise not have been the case. Visitors to the island are often moved to comment
on this heightened level of awareness and information on issues of global (and local)
significance and on the capacity of the average Barbadian to comment intelligently on the
impact of these issues on national development.

Apart from its scope, the independence of the Barbadian media has also
been an important factor in the enabling socio-political environment of Barbados. The
Caribbean Broadcasting Corporation which manages the lone local television station, and
two of the radio stations is publicly owned and all of the other media houses are private
companies. As a consequence, the Barbadian media has largely been independent of political
control and has been free to assume a central role in shaping public opinion and to
provide critical analysis of governmental policies unfettered by party political
considerations. In this regard the Barbadian media has gone beyond the reactionary
approach to issues of public concern to taking the lead in the sensitisation and
mobilisation of the public. This role has recently been taken to the point where media
houses have been themselves organising town hall meetings around various social issues and
thereby galvanising public reaction.

Physical and infrastructural factors

Barbados differs geo-physically from most of its Caribbean neighbours.
Whereas the majority of the islands in the chain were created through volcanic activity,
Barbados origins are essentially through coral accretion. As a result the relatively
flat and gently rolling terrain of Barbados contrasts sharply with the steep forested
mountains of its closest neighbours. This topography together with its geographical
location as the easternmost island of the Caribbean chain were critical factors in its
early history and continue to impact on its social development. The flat terrain made
sugar cane cultivation that much easier than elsewhere and, as the first port of call for
the transatlantic slave ships, there was always a ready supply of labour. By the mid
seventeenth century therefore, within thirty years of settlement, Barbados was already
heavily cultivated and densely populated.

The flat terrain and dense population have contributed to Barbados
having, in proportionate terms, the most extensive road network in the Caribbean. This
network includes over 1,500 kilometers of major roads which provide ready access to all
parts of the island through a series of highways which cross the island in both east-west
and north-south directions. This highway system links the capital of Bridgetown with the
other minor towns as well as the air and sea ports. In addition, there are approximately
1,475 kilometers of paved secondary roads which are linked to the main roads servicing all
parts of the island. With no rivers, mountains or deep valleys to traverse, this extensive
road network has created a situation where it is possible to physically travel from any
point in the island to any other in less than an hour.

Barbados has an extensive public transportation system organised
through the publicly owned Transport Board and a network of privately owned "public
service vehicles" which service the entire island. Most routes are serviced from as
early as 5:00 a.m. and until 12:00 midnight and the fare is standardised at $1.50
regardless of the length of the journey. As indicated elsewhere, the elderly (65 years and
over) travel free on the Transport Board buses on presentation of their National
Identification Card and there is also a subsidised fare for school children in uniform.

In terms of international communication, the Grantley Adams
International Airport (even now in the process of expansion) can accommodate any size
aircraft and in fact is one of the few countries in this hemisphere with a regularly
scheduled Concorde service. Similarly, the Bridgetown Port has berthing facilities to
accommodate even the worlds largest cruise liners many of which dock there as part
of their Caribbean schedule. In addition, Barbados offers its citizens and those resident
and doing business in the island state of the art satellite communication with virtually
anywhere in the world. At the last census (1991) almost 70 per cent of Barbadian
households had telephones (Table 3.7) and there is international direct dial
facility to almost anywhere.

The Barbadian population enjoys universal access to safe drinking
water. The 1991 census indicated that approximately 93 per cent of households had running
water (Table 3.7)and most other households were within walking distance of
a standpipe (public water supply). Although the quality of the water is high and the
supply reliable, Barbados has been classified as a water scarce country and a desalination
plant is currently under construction as an element in the water supply and management
programme. In respect of liquid waste disposal the Bridgetown sewerage treatment plant has
been operational for some time and the construction of sewerage systems for the south and
west coast settlement corridors is well advanced. As far as solid waste is concerned, the
Sanitation Service Authority is the government agency responsible for the collection and
disposal of refuse, street cleaning, the operation of public baths and conveniences and
the administration of five public cemeteries. The current refuse disposal system consists
of a Pulverization Plant and the Mangrove Landfill and there are incinerators at the Queen
Elizabeth Hospital and the Bridgetown seaport.

These features of the Barbadian physical infrastructure particularly
with respect to transportation and communications are important elements of the enabling
environment for social development. Barbados enjoys an advantage over many of its
Caribbean neighbours particularly in respect of the quality of its road network and its
system of public transportation. The excellent physical access to all parts of the island
has meant that geographical access to social services is not as problematic in Barbados as
it is in many of the other islands. It has also meant that the costs associated with the
delivery of these services is proportionately reduced since transportation and
communication are often substantial cost elements in social programme delivery. Barbados
has therefore not had to deal with the issue of extensive decentralisation of services
simply to facilitate access to geographically isolated communities, which faces even some
of the smaller islands as a consequence of their topography and limited transportation and
communication network. There are however Rural and Urban development Commissions to cater
to the rural and urban needs of the country.

The NGOs and interest groups

Any examination of the enabling environment for social development in
Barbados would be incomplete without some examination of the role of non-governmental
organizations and interest groups in creating and influencing that environment. In fact,
an examination of the sectoral discussions on social policy development presented here
indicates that the NGO sector has been a major factor in social programme delivery,
particularly in respect of the personal social services such as programmes for the poor,
the elderly and the disabled. The history of the development of social policy in Barbados
clearly shows that many features of the social welfare programme such as social
assistance, social insurance and child welfare had their genesis in the work of
non-governmental organizations. (Carter, 1987).

Even in the pre-independence period there was an impressive corps of
interest groups and service clubs promoting specific aspects of social programming such as
the Association for the Blind and Deaf (1950), the Child Health Committee (1954), the
Soroptomists Club (1962) and the Barbados Association for the Mentally Retarded (1963).
Barbados now boasts local branches of almost all the major international service
organizations such as Rotary, Lions, Kiwanis and the Red Cross, which have been making a
substantial contribution to the social services. The Roett & Joseph Report (1998)
estimates that the contribution from this sector to children in care, those on the welfare
roll and senior citizens alone totalled some $100,000.00 in fiscal 1995/96.

Quite apart from its direct involvement in social programme delivery,
the NGO sector has played an important catalytic, advocacy and monitoring role in the
social development of Barbados. Many of the international service clubs have developed
particular focal points within the whole spectrum of social development such as the Lions
Club (the blind) and the Soroptomists (the elderly) and then organised activities such as
lectures, workshops and public information campaigns in promotion of the interests and
concerns around that focal point.

There is no strong tradition of pressure group political activity in
Barbados, however the post-independence period has seen the emergence of a number of
groups and organizations agitating for social change or mobilising public interest around
specific issues. In the context of the specific social policy areas under consideration
here groups such as the Barbados Association of Retired Persons (BARP), the Barbados Youth
Development Council (BYDC) and the Barbados National Organization for the Disabled
(BARNOD) have emerged representing the interests of retired (and elderly) persons, youth
and the disabled respectively. Within education there are a number of relatively powerful
and well organised interest groups such as the National Council of Parent Teachers
Associations (NCPTA), the Barbados Association of Principals of Public Secondary Schools
(BAPPSS), The Barbados Independent Secondary Schools Association (BISSA), the Association
of Public Primary School Principals (APPSP) all of which played a direct role in the
shaping of the White Paper on Education Reform.

In the area of health policy a number of support groups exist
particularly in relation to chronic diseases such as diabetes, cancer, HIV/AIDS and heart
disease. Apart from providing support for victims of these diseases and their families,
these groups are also involved in public education, mobilising funds to purchase equipment
and improve facilities and organising lectures and workshops. In terms of public health
there is a relatively well organised environmental lobby which has gained momentum over
the past five years or so as a consequence of resistance to the proposed location of a new
landfill. This particular case represents perhaps the most explicit example of
"pressure group" lobbying in the last decade or so.

The trade union movement has exercised considerable influence on the
socio-political and economic environment in Barbados over more than half a century. From
the Barbados Workers Union, which was registered in 1941 to the umbrella Congress of
Trade Unions and Staff Associations registered in 1994, the thirty-two trade unions
registered with the Labour Department (Annex 5)cover
the entire range of economic and commercial activity in Barbados. The trade union movement
has obviously been concerned with the protection and advancement of the terms and
conditions of employment of its membership and by extension the general labour force.
Aside from this however, the Barbados Workers Union in particular has remained
faithful to its historical role in defending and advancing the interests of the working
class. In this regard the trade union movement has never limited its programming and
orientation to the relatively narrow considerations of industrial relations, rather it has
consistently given its attention to the full spectrum of issues related to national
development. This involvement of the trade union movement has contributed substantially to
the level of public education of its membership and the broad masses of the population and
has facilitated much more informed judgement on issues. In addition, policy makers have
had to be constantly aware of the interest and potential power of the union in respect of
ensuring that programmes advanced were consistent with the interests of the masses. This,
as much as its industrial relations role has been a central contribution of the unions to
the enabling environment for social development in Barbados.

Political stability

In 1999 Barbados celebrated 360 years of unbroken parliamentary rule
and although all but the last 50 years took place to the general exclusion of the mass of
the population this fact is symbolic of the high degree of stability that has
characterised Barbadian political life. Barbados is also one of the few Caribbean islands
never to have changed (colonial) hands after it had been settled which in itself led to a
level of institutional and administrative continuity that was almost unique in the
Caribbean.

The platform for political independence was preceded by a number of
constitutional reforms including the introduction of universal adult suffrage in 1950; the
abolition of the old vestry system and its replacement by three local Government Councils;
and the establishment of a ministerial system in 1954 followed by a Cabinet system in
1958. Barbados therefore went into Independence in 1966 having seen the replacement of the
planter/mercantile elite that had dominated political life for three centuries by two
major mass-based political parties  the Barbados Labour Party and the Democratic
Labour Party. These parties were led respectively by Grantley Adams and Errol Barrow whose
stature as political leaders transcended Barbados  Adams having been Prime Minister
of the West Indies Federation and Barrow one of the founders of the Caribbean Free Trade
Association (CARIFTA) and later CARICOM. They are now two of the National heroes of
Barbados.

Table 3.9

Post-independence political elections in Barbados

Year

Winner

Margin

1971

DLP

18-6

1976

BLP

17-7

1981

BLP

17-10

1986

DLP

24-3

1991

DLP

18-10

1994

BLP

18-9-1*

1999

BLP

26-2

One seat was won by the National Democratic Party (NDP).

Source: Various sources. Compiled by author

Of the post-independence period Duncan (1999) observes that
" the regularity and peacefulness of party succession to power between the BLP and
the Democratic Labour Party (DLP) has been a significant characteristic despite some
challenges to this two-party alternation." There have been seven elections since
independence with the DLP winning three and the BLP four and in that time there have been
three changes of government often with major political swings but completely unaccompanied
by electoral violence or serious charges of political interference (Table 3.9). In
fact, Barbados enjoys an international reputation for the "freedom and fairness"
of its political elections and a number of its officials have participated in the
administration and monitoring of electoral processes in the region and beyond.

Perhaps the most telling statement of Barbadian politics in the
post-independence period came on June 7, 1994 when Prime Minister Erskine Sandiford was
defeated in a no-confidence motion brought against him by the Opposition Barbados Labour
Party. This event followed the increasing unpopularity of the DLP government after the
implementation of the structural adjustment programme on the basis of IMF proposals in
1991. The successful no-confidence motion, unprecedented in Caribbean political history
was achieved with the support of some of the DLPs own members of Parliament and
demonstrates a supreme level of confidence in the political and constitutional mechanisms.

Barbados political stability has created, and in turn fed on,
this confidence of its people in its political institutions and processes. It has
contributed to a socio-political and economic climate which has promoted investor
confidence and a disposition to entrepreneurial risk-taking that would certainly not have
obtained otherwise. In addition, Barbados has been able to get on with the business of
social and economic development without the disruption or diversion of its energies and
resources to deal with social and political instability. Beyond all this however, has been
the generalised confidence and self-belief of its people which has allowed the country to
meet challenges head on without being overwhelmed by self-doubt. In identifying the major
challenge facing Barbados as charting a path of development that is truly transformativeDuncan (1999) observes that "certainly, if any country in the Anglophone
Caribbean can do it, micro-state Barbados can."

Social cohesiveness and participation

Barbados success as a country has been achieved at least partly
as a consequence of some basic level of social consensus among, and active participation
of key members of civil society. As has already been pointed out, NGOs, the private
sector and trade unions have been pivotal agencies both in the delivery of social services
as well as contributing to an enabling environment for social and economic development. It
is important to note here that the contribution of these agencies has been all the more
effective because their general goals and objectives have been consistent with those of
mainstream governmental policy.

The social consensus that has facilitated this consistency of
programmatic objectives has not developed by accident; rather it has had to be actively
created and fostered. However, it is also true to say that the Barbadian social structure
more naturally lends itself to the building of this social consensus than almost anywhere
else in the Caribbean [see Ross-Brewster, 1995]. Some of the socio-historical factors that
have been cited here such as the continuity of metropolitan control by Britain and the
labour sufficiency occasioned by Barbados position in the Atlantic slave trade have
created a population without the extreme social differentiation of many of its neighbours.
An examination of the ethnic distribution of Barbados population (Table 3.10)
shows a high degree of racial/ethnic homogeneity. Similarly, in terms of religion,
although there is a relatively high degree of denominational pluralism among Christians,
the members of non-Christian religions (Hindu, Muslim and Rastafarian) accounted for just
1 per cent of the total population.

This condition of relative ethnic and religious homogeneity are
important in the context of building national consensus and in fact, one of the major
theoretical perspectives on social stratification in Caribbean society cites racial and
ethnic pluralism as the principal dimensions of stratification. The examples of the
relatively plural societies of Trinidad & Tobago and Guyana have demonstrated how
ethnic differences can be replicated in party political polarisation with the resultant
negative consequences for national consensus.

Table 3.10

Percentage distribution of Barbados population
by ethnic group

Ethnic Group

Percentage

Black

92.5

White

3.2

Mixed

2.4

Indian

0.8

Other

0.1

Not Stated

1.0

Total

100.0

Source: Barbados. Population and Housing Census, 1990

In terms of policies to foster the participation of key sectors of
civil society, there has been a consistent policy of ensuring the representation of
critical interest groups at the highest level  the Parliament. The Barbados
Constitution gives the Governor General the power to appoint seven of the 21 members of
the Upper House (Senate) as independent senators at his own discretion. This power has
historically been used to ensure that such interests as religion, business and the trade
unions are represented at this level. In similar manner, there has been a general policy
of broad-based representation on key Statutory Boards ensuring that, depending on the
nature of the Board, the main interest groups are able to impact on policy and thereby
make their contribution to national economic and social development. In this regard, the
trade unions, the private sector and religion generally have some level of representation
in the main administrative agencies of social policy in Barbados.

As has been indicated elsewhere in this section, the period since the
1990s has been marked by a more deliberate attempt at participatory and research-driven
social planning. A number of National Commissions, Task Forces and Standing Committees
have been established to examine a range of social issues with a view to policy
formulation. These social enquiries have taken place in respect of youth, the elderly, the
disabled, as well as in education and

specific aspects of health policy and there has generally been broad
representation from the relevant interest groups in these groupings. One of the more
interesting of these agencies has been the establishment of the Committee for National
Reconciliation with the objectives to inter alia:

Identify and examine the factors relating to race, class, inequality and prejudice that
hinder the evolution of a more peaceful, harmonious, integrated and productive society;

Provide information on the nature, critical characteristics, extent and dimensions of
race relations in Barbados, the opportunity structure, the nature and role of gender in
those issues, employment practices, economic opportunities, the critical relationship
between race and class, factors that shape economic distribution;

Establish a programme that will guide and expedite the process towards national
reconciliation;

Extend the concept of social partnership to include all Barbadians so that they all see
themselves as important stakeholders in national development.

This Committee, with the broad objective of examining historical social
inequality in Barbados and making recommendations for the process of reconciliation, has
also followed the pattern of fairly broad representation and through its work programme
thus far has sought the input and involvement of a wide range of interest groups.

The structural adjustment period of the early 1990s while creating a
great deal of hardship for the Barbadian population also subsequently served as a rallying
point for a number of the critical "social partners". The first Protocol on
Prices and Incomes negotiated by the social partners  Government, the trade unions
and the private sector came into operation in 1993 and called for a freeze in basic wages
and salaries except in low income sections of the workforce or through incentive schemes
such as profit-sharing and productivity bonuses. This social contract was built on the
consensus among the social partners on the need to stabilise the economy and particularly
to prevent the devaluation of the Barbadian dollar. This was followed by a second two year
Protocol in 1995 that was later extended by another year to 1998 even though the economic
crisis which had led to the introduction of the first Protocol had eased.

In April 1998 a third Protocol was negotiated, this time during a
period of relative economic growth and stability. This new protocol has matured into a
comprehensive social compact addressing a number of vital issues:

It represents an attempt to consolidate and expand the social dialogue
model by setting standards for behaviour that is based on mutual recognition, respect and
trust The Barbados model of tripartism and social dialogue has become a major point
of reference and study of the social and economic advantages of social dialogue and
national tripartite agreements that is gaining ground in the Caribbean (ILO, 1999).

Through this model of tripartism Barbados has effectively shaped a
mechanism to promote the development of national consensus around matters of national
economic and social development. This, together with other initiatives and policies
described, here has brought a level of resilience to economic and social life in Barbados
grounded in social cohesiveness in the face of perceived national challenges that has not
existed to the same degree elsewhere in the Caribbean.

Monitoring mechanisms

For all of its achievements in respect of social service delivery there
is no established tradition of social policy evaluation in Barbados. That situation is
changing however, driven by the mutually reinforcing dynamics of conformity to
international requirements and the exigencies of reform in the public sector.
Nevertheless, the process has been slow since a culture of exposing public sector agencies
to scrutiny with a view to measuring efficiency and effectiveness and of collecting and
using of information in social impact assessment cannot be created overnight.

With respect to the international dynamic for change, international
funding and development agencies have for some time been including formative and summative
evaluation as integral features of their assistance programmes. The consequences of this
requirement, though specific to the programmes supported by agencies such as the Caribbean
Development Bank, the World Bank and the United Nations agencies, has been positive both
in terms of creating an environment that is more supportive of impact assessment as well
as the objective demonstration of its utility and value.

In spite of the fact that there has not been an established culture of
information usage for social impact assessment, Barbados did start off with the
advantage of a British colonial legacy which placed considerable emphasis on the
collection of basic socio-demographic information and the production of official reports
on a range of social issues. It is a legacy that is shared with most of has its Caribbean
neighbours and has given rise to a tradition of records management on which the
development of monitoring mechanisms for social development can be based. Even without
formal impact assessment being built into social policy programmes, therefore, social
planners in Barbados have a sound base of systematic, formal reports which lend themselves
to basic evaluation methodologies such as time series analysis and longitudinal studies.

Particularly in the last two decades, as evaluation research and impact
assessment have become more widespread, many public sector agencies have developed or
strenghtened their institutional and human resource capacity to engage in this type of
analysis. For example in the area of employment policy, the Manpower Research and
Statistical Unit (MRSU) in the Ministry of Labour has been upgraded and restructured for
the specific task of implementing a computerised Labour Management Information System.
Similarly, the Housing Planning Unit, which had been established in 1979, has evolved with
the pivotal responsibilities of policy formulation, planning, project implementation and
coordination in the Ministry of Housing. In education, the Government has set up a Policy
Planning and Research Unit with similar functions in respect of education policy. Similar
initiatives have taken place across the public sector. In addition, a number of
governmental departments have set up National Advisory Committees with the responsibility
of monitoring policy implementation and advising on new Areas for reform and action.

At the national level the Government itself has articulated a position
that the transformation of Barbados will require the Government to be the principal agent
and example of change and has set about a comprehensive programme of public sector reform.
To pilot this programme the Government has set up the Office of Public Sector Reform, a
National Task Force on Public Sector Reform and a Steering Committee headed by the Prime
Minister. Among the stated objectives of this programme are to make the public sector
customer driven and to create a culture that encourages efficiency, responsiveness,
effectiveness and competitiveness. Among the proposed initiatives are the implementation
of a Customer Charter Programme for agencies interacting daily with the public to improve
quality of service, value for money and expand accountability and the complete
computerisation of the service.

The UNDP Human Development Report (1999) ranks Barbados at 29th
out of 174 countries, placing it in the high human development category. This
ranking places it ahead of all the countries in Latin America and the Caribbean. Only
Canada and the United States of America in the Western hemispheres were ranked higher.
This is an enormous achievement, particularly when examined in the context of
Barbados small size and relatively narrow natural resource base. Such an achievement
is not accidental but comes as a result of a combination of natural advantages, historical
antecedents, cultural elements, and effective political and economic management. The
institutional framework and policy measures are critical to the development process.

Perhaps the first and most obvious lesson one can learn from the
development experience of Barbados is that small size and a narrow physical resource base
do not necessarily preclude the possibility of substantial social and economic
development. This point has been made on several occasions in the Caribbean within the
context of the development potential and viability of small island developing states
(SIDS). It is however much easier to articulate theoretically than demonstrate
empirically. Of the countries ranked above Barbados on the human development index for
1997, only Iceland, Luxembourg and Brunei-Darussalam are of comparable population size.
None of these countries are physically small as Barbados. Barbados is ranked ahead of
Malta which is comparable in both population and physical size. The specific features of
Barbados social and economic development experience should therefore provide useful
policy and institutional lessons for other small island developing countries as they seek
to confront the challenges of a new global economy. Given the quantity
constraint (e.g., resource base, market size), the small developing countries must place
greater emphasis on the quality factor.

The second lesson which can be drawn from the development
experience of Barbados is the need for sound and purposive development planning. A
tradition of development planning and government budgetary policies has been an important
feature of the country since the end of the Second World War. Such development planning
provides a vision for the country and signals to the business class the general direction
in which the government wants the country to go. The development planning exercise,
coupled with short-term operational planning (i.e., government budgeting) provides the
basis for reflection on past experiences and learning. Development planning in Barbados
has been indicative in nature with the Government providing the institutional framework
and policy initiative for the private sector enterprises to operate successfully.
Development planning provides the context within which small developing countries with
limited resources and facing pressures from a dynamic environment can take stock and plan
forward in the medium term.

A third lesson derives from the critical nature which human resources
development undertaken via expenditure on education and training and health can boost the
economic development process. The Barbados experience adds to the growing body of
empirical evidence which shows a positive relationship between social investment and
economic development. The socio-geographical and social-historical realities of Barbados
have long created an impulse to spend on social services to a much higher degree than in
other Caribbean countries. The high density of the population and consequently, a greater
threat of epidemic and communicable diseases led to the early investment in health,
especially in public health. In addition, the lack of alternatives such as peasant
agriculture due to the unavailability of land, and the aspirations of the population
beyond the plantation created a demand for education unparalleled in the region. Indeed,
in the 1950s and early 1960s, the government actively promoted the emigration of educated
and skilled persons to alleviate the problem of surplus of labour in the country.
Furthermore, the governments legislation of a school leaving age which ensures that
all children are exposed to secondary level education up to 16 years has been instrumental
in enhancing the human resource base of the country. Barbados investment in its
human resource capacity has created a labour force whose quality, flexibility, resilience
and trainability exceed that in other SIDS in the Caribbean and also in the rest of the
world.

The consistency of social expenditure has been sustained in the
post-independence period where approximately one-third of current expenditure has gone to
health and education alone. Bishop et al (1997) in a review of social development
in Barbados have noted that gains on the social front were largely due to the initiatives
taken by the Government in response to the demands for social services by the population.
They further pointed out that "the implementation of the various programmes in health
and education were facilitated by a combination of demographic, social, economic and
political factors assisted by the physical characteristics of the country" which
permit easy access to the social services (p. 24). In his assessment of Barbados
success in the area of health, Ramsay (1995) argued that Barbados was able to surpass the
other Caribbean countries because it has a better literacy rate which enabled the health
education message to be spread, the best water supply system in terms of quality and
distribution, better housing conditions and latrine arrangements and a stronger economy
which has provided more funds for expenditure on a health care system. In addition, the
topography of the island permits easy access to the range of social services. For example,
there are primary and secondary schools in all the parishes in the country. A health care
network of polyclinics and district hospitals are strategically located to cater to all
points of the country. In the context of health services, Ramsay (1995) concludes that
"the lessons to be learned from Barbados experience is that through
well-planned health care policies and programmes implemented by committed health care
personnel, it is possible for a middle income country like Barbados to rise from a
position of being one of the most unhealthy small island states to surpass many
industrialized nations by utilizing low-technology, low-cost public health measures, all
in the relatively short-time span of half a century".

The development of the physical and social infrastructure (roads,
transport, housing, public utilities) has complemented the development of the social
services. The state has played a critical role in the social and physical development of
the country over the years. It has been the consistency of government planning and
expenditure on these facilities that has served as one of the many pillars of relative
prosperity of Barbados in the post-independence period.

A fourth lesson which can be derived from the Barbadian
development experience is the need to have a strong public education programme to permit
popular participation in the decision-making process and to provide the population with
vital information of national importance. Barbados has developed an independent media
system which can provide the population with vital information and also undertake critical
analysis of public programmes and policies. Associated with the public media is the
influence of several non-governmental organizations (NGOs) which push particular sectional
interest. These NGOs act as important lobbying and advocacy groups which are important to
the democratic process.

The post-independence period has been associated with good governance
(the exercise of authority, control, management and power of government in the conduct of
the countrys affairs and use of resources for national development), a respect for
political rights and civil liberties (i.e., a democratic tradition) and the development of
a respected civil society (that is, the sphere of social interaction comprising a range of
organizations outside of direct state control). These features have enhanced the
social capital associated with the success of Barbados (Ross-Brewster, 1995).

Any objective examination of the socio-cultural reality of Barbadian
society would show that the national motto Pride and Industry is more than a
nice-sounding philosophical attraction. It represents a reasonably accurate assessment of
the social psyche and disposition of the Barbadian people. The pride which Barbadians
carry with them has been, to some degree, misconstrued as ethnocentric smugness and
aloofness by many across the Caribbean. The industry which generally typifies their
approach to tasks has often earned a label of a people who do not know how to or cannot
relax and who take themselves too seriously. Nevertheless, these socio-psychological
traits, in the context of the high level of social cohesiveness, participation and
monitoring discussed here are important indicators of the role of socio-cultural factors
(i.e., social capital) in the national development process. Culture viewed as
collective identity or a set of values and attributes, has been an important
element in Barbadian development process.

A fifth lesson from the Barbadian development experience which
can be followed by other SIDS is that careful macro-economic management is vital to the
success of the long-term development process. In a small developing country, small
mistakes can be very costly to the economic and social fabric. Given that such an economy
is constantly subject to external shocks, skilful economic management is needed to avoid
any serious economic dislocation. With the exception of a few periods of economic excesses
associated with electioneering and borrowing from the Central Bank, economic management in
Barbados has been generally good. Inflation rates have been low, fiscal and BOP deficits
have been kept under control (except for a few periods), the exchange rate has been stable
for over 25 years and monetary and fiscal policies have been supportive of economic
expansion and BOP equilibrium. The crisis in the early 1990s brought a new participative
approach to managing economic crises with the establishment of a Social Partnership
involving the Government, private sector and labour unions. The Government has provided
the institutional and incentive framework for the private sector to operate (that is, the
legal framework, organizational structure and fiscal incentives). This framework has been
critical to the development process. The Government has engaged in direct production over
the years, but this approach has not been very successful. In recent years, the Government
has privatized many of its operations and enhanced the policy and incentive measures for
private sector development. It has taken a more regulatory and facilitatory role in the
economy. The emphasis has been placed on operational efficiency and effectiveness in the
public service through the process of public sector reform. Some public agencies have also
been restructured to meet new and more pressing demands.

A sixth lesson, which can be drawn, is the need for the
development of an information/surveillance system to keep track of social and economic
developments within and outside of the country. In a small developing country, this
information is integral to strategic decision-making. Barbados information system is
fairly well developed (although there are gaps in the social and economic database).
Access to the world of information via the media and telecommunications system provides
decision-makers with the material to formulate appropriate economic and social policies.

The six factors outlined above have fuelled the demand for high
standards. It is national pride that refuses to accept long delays in health care, poor
physical plant in schools, potholes in roads, buses failing to run on schedule and garbage
not being collected. The ability of three parties to form a social contract in defense of
the value of the Barbadian dollar reflects national pride and social consensus fuelled by
public information. It is clear that the building of national consensus (e.g., town hall
meetings, commissions, meetings) around national, social and economic developmental issues
is a sine qua non for success on the economic and social fronts. This national
consensus would be vital to the future development of the country as it faces many
challenges associated with globalization, trade liberalization and technological
penetration. To meet these challenges, Barbados would have to strengthen the five factors
which have led to its post-independence prosperity. In many respects, Barbados
approach to economic development is similar to that followed by Singapore (see Huff,
1995). Both countries have adopted a strategic approach to government intervention and
planning, an outward orientation to economic growth, the movement to a services economy,
the development of the human resource base, a stable macroeconomic framework and the
promotion of savings and investment. The difference between the two countries is partly
one of the degree to which these elements have been emphasized. There are of course
differences between the two countries in terms of demography, culture, political
orientation, geography and the social and political dimensions of economic planning.

Barbados development experience however provides useful lessons
which other SIDS can follow. On must however be mindful of the social, cultural and
political differences between Barbados and other SIDS when seeking to implement measures
from the Barbadian experience. Each SIDS would have to tailor the measures identified in
this study to suit its own circumstances. There can be no wholesale transplantation of the
Barbados Model to other countries. It must be recognized however, that the
conjunction of economic, social and political factors is important to the national
development of SIDS. In many respects, it is difficult to rank the critical factors which
contribute to the long-term development of a country.

There are a number of underlying goals, principles and commitments
which Government will pursue seeking to address the major issues and challenges which are
outlined above. These represent both local concerns as well as those which Government
agreed as a result of its interactions in, and cooperation at, the regional levels.

Goals

Government has adopted two major goals in its housing policy and
these are outlined below:-

Adequate shelter for all

Home-ownership for the widest majority of Barbadians

Principles

The seven principles which Government adopts in dealing with the above
issues include:-

Equity -

This has to do with ensuring that all Barbadians have the opportunity
to acquire basic housing, infrastructure, and other associated services. Special provision
will be made for vulnerable groups.

Sustainability -

Activity in the housing sector will be geared towards overall economic
growth and the creation of lasting employment. At the same time steps will be taken to
ensure that our environment is protected through adherence to standards which promote and
maintain safe, healthy living conditions.

Liveability -

This relates to the suitability for human living and the quality of
life generally. It goes beyond the mere provision of dwelling units by taking into account
the hopes and needs of those for whom they are provided. It includes not only healthy
living conditions, but also the provision of opportunity for social and cultural
integration.

Cooperation -

Cooperation is the bringing together of the various interest groups in
the sector in order to work for the successful achievement of adequate shelter for all.
These consist of the private and public sectors and non-governmental and community based
organizations. This participatory process benefits from the pooling of resources, sharing
of knowledge and the provision of the necessary skills.

Civic engagement and government responsibility -

The principle of civic engagement is based on the underlying notion
that all people have basic rights as well as responsibility to accept and protect the
rights of others particularly those for the future. Essentially it seeks to ensure that
all people are encourage and have equal opportunity to participate in decision making and
development. Mechanisms are therefore required to facilitate this activity. At the same
time new attitudes to the role of the technician need to be devised. Government has a
responsibility to protect the rights of all citizens including their right to health, and
safety and to ensure that the appropriate legislation is instituted to achieve this.

Self-help -

The principle of self-help highlights the need for beneficiaries to
recognize their own resourcefulness and to draw on it in solving their housing problems.
It is at the same time associated with the notion of affordability and incrementalism in
housing construction.

Enablement -

The principle of enablement is important to the concept of sustainable
development and the associated principle of civic engagement. It relates largely to the
role of government which has traditionally been that of provider and it stresses
Governments facilitating role base on a use of its legislative and fiscal powers.

Commitments

Based on the above principles Government proposes to implement policies
and programmes which are drafted and executed in cooperation will all key actors. To this
end Government makes the following commitments:

Adequate shelter for all

Government commits itself to the goal of improving, and maintaining
improved, living and working conditions on a sustainable basis so that everyone will have
adequate shelter in environments which are healthy, safe and affordable.

Within the above context Government will pursue the following
objectives:

Ensuring that shelter policies and strategies are consistent with overall national
economic goals, in an effort to support resource mobilization, employment generation and
the reduction of poverty.

Promoting security of tenure, particularly for those households which have been
occupying rented land for prolonged periods of time.

Promoting access to serviced land especially by the lower income household.

Ensuring an adequate supply of affordable rental housing both in the public and private
sectors, at the same time recognizing the rights and obligations of both tenants and
landlords.

Encouraging the supply of good quality housing through rehabilitation, upgrading and
continuous maintenance of the housing stock.

Promoting shelter and the provision of basic services for the homeless, the
"poorest of the poor", battered women, the elderly, the disabled and victims of
natural and man-made disasters.

Ensuring a more efficient use of the housing stock by keeping levels of over-crowding
and under-occupancy to a minimum.

Securing the most efficient use of residential land by ensuring that vacant lands,
particularly in the urban area and in serviced developments, are brought into occupation.

Government is committed to the goal of giving every Barbadian the
opportunity of owning a house. This goal is based on the notion that the greatest degree
of social progress is possible where citizens have a stake in the country. To this end the
following objectives will be pursued:

The strengthening of the regulatory and legal framework to enable housing markets to
work and to foster self-help.

The encouragement of home ownership through the provision of select fiscal and other
monetary incentives aimed particularly at those who help themselves.

Facilitation of home ownership among public sector housing tenants by ensuring that
mechanisms are in place to allow them to purchase the units which they currently rent.

Intervention in the market in the most appropriate form to ensure that the demand for
dwelling units is satisfied.

Acknowledgement and harnessing of the potential of the informal sector in providing
housing and services for the poor.

Creation of an environment which protects home owners, particularly mortgagees, from the
loss of their property owning to the worst effects of unemployment.

Increasing the provision of serviced lots and other incremental housing solutions geared
to meet the needs of potential new homeowners.

Financing shelter

The availability of finance, on terms and conditions which meet the
needs of those who require it, is a pre-requisite for the achievement of a successful
housing programme for home-ownership. In its efforts to ensure an adequate supply of money
government is committed to strengthening the existing financial market and developing new
mechanisms. In this respect its objectives are to:-

Ensure that adequate funds are available to meet the demands for housing in accordance
with terms and conditions which make them generally affordable by the households which
demand them.

Create a climate which facilitates the investment of funds, from both local and foreign
sources, in the housing sector.

Target, where appropriate, subsidies to those who are not served by the market while at
the same time promoting appropriate credit mechanisms to meet their needs.

Provide financial subsidies mainly by way of tax allowances extension and deduction
should be provided as incentives for private developers to supply low rental accommodation
as a Welfare Service for house holds whose circumstances do not yet allow them to
contemplate "home ownership".

Lower the qualification requirements and eliminate certain fees presently charged to
facilitate greater access to mortgages by low to middle income households.

Lengthen the mortgage repayment period and encourage a broader base of joint ventures to
include the credit unions to collaborate on -

 Non-payment of negotiable and application fees

 Extension of time period for commitment fees

 The offer of 100 per cent mortgages subject to predetermined
valuation and loan repayment ratios

 The provision of one-stop hassle-free mortgage

Services inclusive of:

legal services

insurance services (mortgage, life, protection and property)

land tax payment

offer of bridging finance at a rate of interest no greater than 1 per cent of the
prevailing mortgage rate.

In giving effect to the principle of enablement government is committed
to strategies which recognize the role which the various key actors in the public, private
and community sectors have to play and the contribution which they can make to the
successful implementation of shelter development. In this respect the government will
pursue the following objectives:

Exercise public authority and use public resources in a transparent and accountable
manner;

Foster and encourage greater involvement in the policy formulation and implementation
processes among the various keys actors in the housing sector including land developers,
materials suppliers, builders, professionals, community based groups and non-governmental
organizations.

Establish mechanisms which facilitate, and promote practices which actively seek the
participation of community groups in the design of programmes and the formulation of
development proposals for the improvement of their communities.

Institute capacity-building for shelter management and development activities conducive
to the inclusion of broad based participation.

Wickham P. (1997). "An Overview of Post-Independence Political
Issues in Barbados" in J La Guerre (ed): Issues in Government and Politics in
the West Indies (School of Continuing Studies, UWI, St Augustine, pp 167-204.

World Bank (2000). World Development Report 1999/2000
(Washington, DC).